A change order needs to be in writing and signed by both parties before any extra work starts. This sounds obvious, but most disputes between contractors and clients happen because the change was discussed verbally and never documented.

Include a clear description of the work. What is being added, removed, or modified from the original scope? Be specific enough that there is no ambiguity about what was agreed to. “Additional electrical work” is not enough. “Install four additional 20-amp circuits in the garage per owner request” leaves no room for confusion.

Break down the cost. Show labor, materials, and subcontractor costs separately. Include your markup. Clients are more likely to approve a change order when they can see where the money goes. A lump sum number invites questions and hesitation.

Note the schedule impact. Does this change add days to the project timeline? If so, say how many and why. This protects you when the project runs past the original completion date and the client wants to know why.

Get signatures. Both parties sign and date the document. An unsigned change order is just a proposal. Keep copies in your project file and in your accounting records.

Number your change orders sequentially. Change Order #1, #2, #3. This makes referencing them in billing and job cost tracking straightforward. When you are on change order #7 and need to review what was approved in #3, a clear numbering system saves time.

Track change orders separately from your original contract in your books. Your original estimate had a budget. Change orders add new scope with new budget. If you lump everything together, you cannot tell whether you were accurate on your original bid or whether you made money only because the client kept adding scope. This separation matters when analyzing job profitability after the project closes. A project that looked profitable might have actually lost money on the original scope and only made it up through approved changes. That information improves your estimates on future bids.

Some contractors use formal change order templates. Others use their project management software. The format matters less than consistency and completeness. Every change order should have the same information. Description, cost breakdown, timeline impact, and signatures.

One more thing worth mentioning. Get the change order signed before the work happens. Doing the work and sending the change order after gives the client leverage to negotiate or refuse payment. The time to get agreement is when they still want the change done, not after you have already completed it. A Queen Creek bookkeeper who works with contractors sees this problem constantly. Unsigned change orders sitting in a file, work already done, and now the client is pushing back on the price.

Write it clearly, price it completely, get it signed, and track it separately. That is how change orders work when they are done right.