Change Orders are an unavoidable part of most construction projects—even if you are thorough in your pre-planning, you cannot always account for every circumstance that will arise as you work on the project that forces you to make some modifications.
A failure to properly manage the change order process can lead to increased costs, delays in projects, lost money and, most importantly, frustrated and unhappy customers. It also makes it more difficult to stay on top of your bookkeeping if you have to frequently go back and change numbers in your reports.
With this in mind, here are some tips to help you get more organized with your change orders to ensure every still runs smoothly.
Identify any potential change orders as soon as possible: The longer you wait in a project to report your change orders, the more complicated it becomes for your bookkeepers to go back and make the necessary changes. Therefore, you should make it a priority to pinpoint potential change orders early on in a project so you don’t have to stress about it later on in the process. Document and keep thorough records of all these prospective changes and get that information to your bookkeeper immediately.
Put together templates for your change orders: You should have standard processes and forms for your change orders, which will make the process less complicated, save a lot of time and make sure everything your bookkeeper gets is consistent. Using different processes for each change order makes matters unnecessarily complicated and confusing. There are many bookkeeping programs and other software that have change order templates you can use.
Use project management software: Speaking of software, if you can find a mobile construction software you like, you should definitely consider using it. Project software automates and manages all of the little details you need to put into your change orders, which helps you make sure nothing gets forgotten. It also helps to improve collaboration within your workplace by giving all on-site workers access to these documents, which means everyone will have the most accurate, up-to-date information about change orders to prevent any confusion or mistakes. After the change orders are completed and approved, the software can send out alerts to everyone working on the job. There are plenty of other features these types of software include, but the change order management features are especially helpful.
Take photos: It’s important to have photos on hand so you can document the process of change orders. The conditions at construction sites will change relatively quickly based on weather or any other unforeseen circumstances, which means you might need to take certain actions without approval just for the purpose of safety and protecting the project. Taking photos documents the changes that lead to these actions so you can provide evidence that these actions were necessary. While this doesn’t directly impact your bookkeeper, it does reduce the chance that the owner of the property will deny a change order claim.
For more information about how your change order processes can affect your bookkeeping, contact us at Patin and Associates today.