Pricing changes for a change work order isn’t easy when the scope of work isn’t clear.
Change Work Orders
Michael discusses a ploy some building owners use to not pay for all of their change work orders. It happens in both residential and commercial projects.
You shouldn’t sign a contract that stipulates what you can charge, even if it’s just on the change orders.
Contract issues that can and should be written into every contract. These are issues that can put a real dent in both your profitability and your time.
Last week we discussed having signed Change Work Orders (or Additional Work Orders). Today we’ll discuss 4 mistakes often made when writing Change Work Orders.
Change work orders are one of the major reasons contractors go out of business. They close their doors when clients won’t pay for changes that weren’t in writing.
Contracts and change work orders are among the top reasons construction-related businesses fail. Or rather, not using contracts or change work orders.
I hear too often from contractors and clients about contractors deliberately underpricing jobs so they can later write change work orders at inflated prices.
Don’t forget your Change Work Orders. When a client requests a CWO, you need to make sure the paperwork includes a payment schedule that keeps your cash flow positive.
The language in your contract that addresses Change Work Orders should be specifically reviewed with your customers before they sign the primary contract.
Every change work order should list 3 prices. This eliminates customer claims they didn’t know what the changes would cost or what the final price would be.
Change Work Orders cost you time and money. Most of the time, they happen because of a lack of good questioning to find out what the client really wants and can pay for.
The owner thought the charge for the change work order was too high and they weren’t going to pay. Would that be considered a bad debt?
In case you don’t think it’s important to have change work orders signed and paid BEFORE making a change, read this note I received from a homeowner yesterday:
This scenario is a reminder of the importance of a good contract, signed change work orders, checking details to make sure a job is done right.
We have discussed Change Work Orders for several years now, but new stuff keeps cropping up. Let’s take a look at some of the new things that have come our way.
Questions on change work orders. When should they be written and by whom? How much should you charge? How do you get your employees to write them?