Being a construction contractor can often involve more paperwork than expected.
You need to manage contracts and change orders. You should create an organized change order log and tracking system because it can help you turn change orders from liabilities to assets.
Change orders are a part of the construction process. They are a necessary evil, but they can also be managed with the right system.
Keeping the paperwork organized can help you keep track of how much the changes will cost, and what the timeline for completion will be. If you own a construction company, the organization will keep you on track of numerous contractors and projects.
If organizational systems are not your strong suit, this article will help. We’ll explain what a change order is, why a system for the organization is necessary, and how you can create an efficient change order logging system for a construction company.
Do Change Orders Need to Be in Writing?
Yes, absolutely. Every change order you create for a project needs to be comprehensively documented. This helps protect you from contract disputes with clients over scope and pricing changes, as well as keeping the project itself on track.
Why Do You Need a Change Order Log
Depending on your influx of contracts, you want to create a system to maintain all change orders and documentation. Since contracts are legally-binding agreements between two parties, no one wants to lose anything.
Construction projects often cost large sums of money. It’s an investment involving two parties, and any dispute can evolve into a massive disagreement. You don’t want to deal with a potential lawsuit or lose money from unpaid work.
Logging your change orders efficiently, and in detail, helps keep everyone on the same page and avoid any miscommunication or misunderstandings.
If you have a log and organizational system for written change orders on one construction project, you can organize the timeline efficiently, by keeping all the information housed in one location.
How to Make a Change Order Log
Not all contractors and construction companies have robust change order tracking systems in place, but having this can make your life a whole lot easier.
Here’s how you can create a change order log system for your own contracting business.
Start by Organizing All Your Change Orders for Currently Active Projects
Change orders can be a nightmare to keep track of — you probably know this by now.
Construction companies often have to deal with lots of change orders simultaneously. This is why it’s essential to organize all your change orders – so you’ll always know what is happening, who is doing what, and how much it will cost.
Decide What Organizational Categories to Use
It is essential to ensure that all of the information from the change order is collected and stored in an organized manner to be retrieved, quickly, if necessary.
The first step is organizing your change orders by different categories. How you go about this will depend on how you want your employees to find the information they need.
The most common ways to organize change orders into categories are by “contractor,” “work type,” “location,” and “date.” You can also designate different types of change orders.
You want to break them down to be organized within a change order log. Whatever system of organizing change orders will work, as long as it simplifies the process. Contractors often use a numerical system for change orders for organization.
Put them into physical files, and scan a digital version to keep copies of the files as a backup.
Create an Excel Document to Input Change Order Data
You’ll have the physical documentation, digital copies, and the log with all the change orders documented.
It’s essential to create an Excel or Google Sheet document to input all the information. This will allow you to understand the work scope clearly, what was ordered, and what was completed. You can also verify information with the original change order.
There are several ways to organize change orders. One way is to create an Excel document and input the information about the change order into columns.
The first column should be for the date of the change order. The second column should be for the type of change order, and so on. Whatever’s easiest for you and your team.
This is a good way to organize change orders because it is easy to input data into Excel and it also allows you to see trends in how many changes are happening over time. It can help improve your business.
Have a Routine for Managing
If you’re an independent contractor or own a construction company, someone should be in charge to oversee the log.
If you need to check in with subcontractors and collect them monthly or quarterly, choose a recurring date for your system and cohesion.
Those who own companies want to keep everyone in the loop of how important change orders are and keep all documentation together.
Pick a set date and routine for all your sub-contractors to submit paperwork and upload. Ensure everyone is on the same page to maintain organization.
For convenience, consider using DropBox or Google Drive to keep a shared folder for you and your clients.
Use Dedicated Change Order Management Software
You can’t escape change orders, but you can reduce the headaches with a solid system.
Keeping track allows contractors to make changes to the plans and keep everything organized. This is important because it helps avoid any confusion among team members and ensures that everyone knows what needs to be done next.
There are many change management software programs available for use in this process, but not all will work for your needs. It is important that you find one that is easy to use and has features that can simplify the process for you, such as keeping information organized or providing templates for different types of projects.
Software also makes it easy to collaborate with others involved in the project, so everyone has access to all of the important information needed to keep projects running smoothly and efficiently.
Ditch manual spreadsheet tracking today! Trak Changes is the preferred software platform for managing change orders. If you’re ready to see the benefits of Trak Changes, try the free trial!
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