Remodeling Contractors - Prevent Disputes By Using Change Orders

If your company is not using change orders, you could be missing out on some profit potential, as well as missing out on an opportunity to increase your credibility. Here’s why.

Let's say you have a customer that wants to add something to their project. You follow their wishes, and then invoice them. They didn't expect the increase of cost, resulting in both parties being unhappy. They gripe, “I wouldn’t have done it if I knew how much it would have cost.”

So, a change order protects you, and perhaps at the time the customer thinks the extra paperwork is a hassle- in the long run, however, you look very professional. Let's say that they want to make a change to the project, the first thing you need to do is gather the existing specifications and estimates. This will show the client that the current price reflects the current specifications. Sounds simple and obvious, but it needs to be shown.

Then, the next step is to gather the new specifications, and then create a change order immediately. Once you provide the change order to them, it is very important not to do any work until they sign off in it, or the scenario listed above is likely to happen. No matter how much you trust your customer, do not listen when they say, “I don’t care about a change order,
just go ahead!”

If a customer is wary of signing off on a change order, discuss the need for it. Let them know how this will update the price- materials and labor. They will have a copy of the change order to add to their contract, and they will be able to see the explaination of the contract change. If you simply invoice them for more, even though they know the additional work
was done, the change order says it in black and white.

Perhaps a change order does not have any effect for some reason. Even still, one should be made and signed off on. It is still a change and/or extension of the contract.

On a final note, change orders are not just good for the client, but also for you. If you find that you are making quite a few change orders on every project you are doing, chances are there are some things being missed during the design stage. You can take this as an opportunity to better finalize contracts before beginning. Perhaps there are too many uncertainties between customer and contractor before the work begins.

You will have a better change of being able to follow the project specifications through completion of the project when you completely work out the initial project specifications.

Nick Hurd is the developer of LiteningFast Estimating Construction estimating software for contractors

Title:
Remodeling Contractors - Prevent Disputes By Using Change Orders
Article Distribution and Free Web Content by www.reprint-content.com

Please Rate this Article

5 out of 54 out of 53 out of 52 out of 51 out of 5 

Not yet Rated