Change Order Tracking
The Change Order Black Hole: Why Approved Work Never Gets Billed
How much money did you leave on the table last year?
If you're like most contractors, you don't know. Because the money you lost wasn't from jobs you bid wrong or customers who didn't pay. It was from change orders that were approved but never invoiced.
This is the change order black hole—and it's one of the biggest silent profit killers in construction.
The Disconnect
Here's how change orders work in most construction companies:
Client requests additional work. Project manager discusses scope and price. Client approves (maybe verbally, maybe in writing). Crew does the work.
Then: Nothing.
The approval sits in an email or a text message. The project manager moves on to the next crisis. The bookkeeper doesn't know the work happened. The invoice never gets sent.
Six months later, you close out the job and realize you completed $15,000 in extras that nobody billed.
Change order leakage happens because of broken handoffs between field operations and accounting.
Project managers approve work and manage crews. Bookkeepers process invoices based on what's in QuickBooks. If there's no system connecting approvals to billing, work falls through the crack between them.
The gap is worse when PM software and accounting software don't talk to each other. Buildertrend might have a record of the approved change order. QuickBooks has no idea it exists. This is exactly why proper integration between systems is so critical.
What a Real Change Order System Looks Like
Eliminating change order leakage requires three things:
First, documentation. Every change order—no matter how small—gets documented in writing with scope, price, and client approval. No verbal approvals. No "we'll figure it out later."
Second, tracking. Every documented change order gets logged with status (Pending, Approved, Billed, Collected). This happens in your PM software with a clear workflow.
Third, reconciliation. Weekly, you reconcile approved change orders against invoiced amounts. If something is approved but not billed, you catch it within days—not months.
When your PM software integrates with QuickBooks, approved change orders can automatically become billable items. The work that gets approved in the field shows up on the next invoice without manual intervention.
That's when the black hole closes.
The ROI Math
Here's a conservative estimate: If you do $1M in revenue and 10% of that involves change order work, you have $100,000 in extras flowing through your business each year.
Industry data suggests contractors lose 5-15% of change order value to unbilled work.
On $100,000 in change orders, that's $5,000-$15,000 lost annually to the black hole.
One good tracking system pays for itself in the first recovered change order.
Salisbury Bookkeeping implements change order tracking workflows that ensure every scope change gets documented, approved, AND invoiced. Our services include system integration and weekly reconciliation to catch gaps before they cost you money. Learn more about our approach or schedule a consultation to close your change order black hole.
