Florida Contractor Change Order Workflow: Keeping Scope, Approvals and Cash Aligned

A change order should connect three records: what is changing, who approved it, and how the change will be billed. Use the workflow below as an internal operating process, adjusting it to your contracts and business practices.

1. Capture the request before pricing it

Create a change-order record as soon as a scope change is discussed.

Record:

• Project and customer
• Change-order number
• Requestor
• Requested work
• Reason for the change
• Affected locations, rooms, systems or plan references
• Relevant photos, drawings, selections and correspondence
• Whether related work is already underway
• Internal owner responsible for the next action

Do not rely on a text thread or verbal conversation as the only record. Attach or summarize the source communication in the project file.

Decision point: Is this actually a scope change?

Compare the request with the signed estimate, proposal, contract and existing approved changes.

• If it is already included, document where it appears and route the question back to the project lead.
• If it changes the agreed scope, continue through the change-order workflow.
• If the scope is unclear, pause pricing and obtain enough detail to define the work.

2. Define the scope boundary

Write a standalone scope description that a field supervisor, customer and billing team can interpret the same way.

Include:

• Work being added, removed or revised
• Materials, finishes, quantities or allowances affected
• Demolition, protection, disposal or restoration included
• Related work specifically excluded
• Customer selections or field conditions that remain unresolved
• Assumptions used for pricing
• Effect on other trades or phases

For deductive changes, identify both the removed work and any work that remains necessary.

Scope-quality check

Before pricing, ask:

• Could the field team determine exactly where to stop?
• Could purchasing identify what should and should not be ordered?
• Could billing explain the charge using this description alone?
• Are exclusions and assumptions visible rather than implied?

If any answer is no, revise the scope.

3. Build the internal cost and price review

Prepare an internal worksheet separate from the customer-facing change order.

Review:

• Labor activities and crew needs
• Materials and equipment
• Subcontractor quotes
• Delivery, disposal and mobilization considerations
• Rework or restoration created by the change
• Credits for removed work
• Internal pricing and margin review
• Taxes or other pricing components supported by the company’s own process

Keep internal costs and customer pricing distinct. Confirm that every included scope item has a corresponding pricing decision.

Decision point: Is the information firm enough to price?

• If supplier, subcontractor or selection information is missing, keep the record in a pricing-pending status.
• If an assumption is necessary, state it clearly in the proposed change.
• If the work cannot be defined reliably, return it for clarification rather than presenting an ambiguous price.

4. Choose the billing treatment before seeking approval

Determine how the approved change will enter the billing workflow.

Possible internal treatments include:

• A separate invoice
• Addition to a progress billing item
• A deposit followed by later billing
• A credit applied to a future invoice
• A combination of charges and credits

Record:

• Total customer price or credit
• Proposed billing treatment
• Any deposit or payment condition selected by the company
• Person responsible for creating the billing record
• Relationship to the original contract value and prior approved changes

The approval request and billing plan should agree. If the change order says one thing while accounting expects another, reconcile the difference before sending it.

5. Conduct an internal release review

Use a short review before the change order reaches the customer.

Release checklist

• Scope is complete and understandable.
• Additions, deductions and exclusions are identified.
• Supporting photos, plans, selections or quotes are attached where relevant.
• Internal costs and customer price have been reviewed.
• Billing treatment has been selected.
• The correct customer contact is identified.
• The proposal distinguishes the change from the original scope.
• No internal margin or job-cost information appears in customer-facing material.
• The field team has not been given conflicting instructions.

Assign a clear status such as draft, pricing pending, internal review, sent, approved, rejected or superseded.

6. Send one approval package

Provide the customer with a consolidated package rather than splitting essential information across disconnected messages.

The package should identify:

• Project
• Change-order number
• Scope addition, deletion or revision
• Exclusions and assumptions
• Price or credit
• Proposed billing treatment
• Supporting customer-visible files
• Approval method requested

Keep the sent version unchanged in the project record. If the scope or price changes, issue a revised version and mark the earlier version as superseded.

7. Control work release

Approval and field authorization should be separate checklist events, even when handled by the same person.

If approved

• Save the approval with the approved version.
• Mark the change order approved.
• Update the project’s approved change total.
• Create the related billing task or record.
• Notify the project lead, field supervisor, purchasing and accounting as applicable.
• Release only the approved scope to production.
• Add approved documents and selections to the field package.

If rejected

• Record the rejection.
• Notify affected team members.
• Confirm that the rejected work is not released or purchased.
• Preserve the rejected version for project history.

If still undecided

• Keep the work separated from approved production scope.
• Identify any purchasing or sequencing decisions waiting on approval.
• Assign an internal owner for follow-up.
• Do not treat silence as approval within the operating workflow.

If field conditions require an immediate business decision

Escalate to the designated project decision-maker. Record the condition, available options, direction received and resulting scope or pricing follow-up. Avoid leaving the field team to infer commercial approval.

8. Connect approval to billing

An approved change order is not financially aligned until its billing treatment is recorded and owned.

For each approved change, confirm:

• Approved amount matches the billing amount.
• Credits are carried into the billing record.
• Deposit or progress-billing treatment matches the approval package.
• Accounting has the approved document.
• The invoice or billing item references the project and change-order number.
• The change is not billed twice through separate records.
• Collected, invoiced and unbilled amounts can be distinguished internally.

Cash-control decision point

Review each approved change and place it in one category:

• Ready to invoice
• Included in an active billing item
• Waiting on a selected billing condition
• Invoiced and open
• Paid
• Credited
• Disputed or on hold

Any approved change without a billing category should return to the project manager and accounting owner for resolution.

9. Reconcile the change-order log

Maintain one project-level log containing:

• Change-order number
• Short description
• Current version
• Status
• Customer price or credit
• Approval evidence location
• Billing treatment
• Invoice reference, if applicable
• Payment state
• Internal owner
• Notes about unresolved scope or disputes

Review the log against the project file, field instructions and accounting records. Investigate mismatches such as:

• Approved work missing from billing
• Invoiced work without matching approval evidence
• Superseded versions still marked active
• Rejected work appearing in purchasing or field instructions
• Credits absent from the billing plan
• Customer-facing scope that differs from the field package

10. Close each change order

A change order can be treated as operationally complete when:

• The final scope version is identified.
• Approval or rejection is recorded.
• Field and purchasing instructions match the decision.
• Billing treatment is documented.
• Related invoices or credits are linked.
• Payment state is recorded internally.
• Superseded drafts are clearly marked.
• Supporting records are stored with the project.

Simple responsibility matrix

• Project manager: defines scope, coordinates pricing and controls field release.
• Estimator: prepares cost and price detail.
• Field supervisor: verifies constructability and follows the approved scope.
• Purchasing: orders only against released scope.
• Accounting: creates billing records, applies credits and tracks payment state.
• Customer contact: approves, rejects or requests revision through the selected process.

Assign named owners inside the company rather than relying only on job titles.

Where Egret fits

• Egret raises an “estimate aging” alert for an estimate that was sent three or more days ago and is neither approved nor rejected, and the alert shows the estimate amount.
• Egret raises an “invoice overdue” alert for a sent invoice whose due date has passed, and the alert shows the invoice amount.
• Egret provides a customer portal reached through a private link. It shows only project information and files marked customer-visible, and it does not expose internal job costs or margins.

Final change-order control checklist

Before work release:

• Scope defined
• Price reviewed
• Billing treatment selected
• Customer-facing version checked
• Approval recorded
• Field instructions updated

Before financial close:

• Approved amount reconciled
• Invoice or credit linked
• Payment state recorded
• Superseded versions marked
• Project log updated
• Supporting records filed