What Is a Change Order and When Do I Need One?

By Bill Stilwell · Last reviewed October 17, 2026

The short answer

A change order is a short written document that describes a change to the agreed work, its effect on price and schedule, and the customer’s approval. Get it approved before you do any meaningful out-of-scope work. Attach it to the original job so the final invoice matches what the customer agreed to.

What this means

17.6.1 Change identification

Changes come from two places:

Customer requests. “Can you add the back fence too?”
Required changes. Hidden damage, code requirements, or a wrong assumption in the estimate (see 11.1.2 Estimate).

Train yourself and your team to spot them. If it’s not in the scope, it’s a change (see 11.1.4 Scope of Work).

17.6.2 Price impact

Calculate the added or reduced cost: labor, materials, equipment, and any fees. Show the new total, not just the difference, so the customer sees the full picture.

17.6.3 Schedule impact

Say how the change affects the start, finish, or delivery date. Even a free change can delay the job.

17.6.4 Customer approval

Get written approval before you proceed, when your agreement or the law requires it, and as a habit for anything meaningful. Approval can be a signature, an e-signature, or a reply that clearly accepts the specific change. The federal Electronic Signatures in Global and National Commerce Act (E-Sign Act) gives electronic signatures and records general legal validity for many transactions. Ask your attorney what counts as approval in your state and trade.

17.6.5 Recordkeeping

Number each change order and attach it to the original job record and agreement. Your invoice should list the original price and each approved change (see 10.7.5 Invoices).

17.6.6 Unauthorized work

Don’t let anyone do out-of-scope work without an approved change order. If a true emergency requires action, like stopping a leak, document it right away with photos and get approval as soon as you can. Your agreement should say how emergencies are handled.

Made-up example: During a bathroom remodel, Stonebridge Builders finds rotted subfloor. The crew stops, takes photos, and the project lead writes Change Order 2: replace 30 square feet of subfloor, adds a set amount, adds two days. The homeowner signs on a tablet before the crew continues. The final invoice lists the original price plus Change Orders 1 and 2.

Why it matters

Unapproved extras often go unpaid. Customers push back on charges they didn’t approve.
Surprise bills cause disputes, chargebacks, and bad reviews.
Schedule changes without notice frustrate customers even when the work is good.
Customers are told to expect it. The Federal Trade Commission (FTC) tells homeowners to get every promise about the work and cost in the written contract.
Good records protect you if there’s a complaint or a legal claim.

Who this applies to

Any business doing project or custom work. Even small businesses with simple jobs benefit from a one-page form. Fixed-price, standard services rarely need them.

How to do it

Put a change clause in your agreement that requires written approval for scope, price, or schedule changes (see 11.1.1 Service Agreement).
Create a one-page change order form: job name, change order number, description, reason, price impact, new total, schedule impact, and approval line.
Stop and write it up as soon as a change comes up.
Explain the change in plain words. Add photos for hidden conditions.
Get approval before doing the work, in writing or by e-signature.
Attach the change order to the job record and agreement.
Update the schedule and tell anyone affected (see 22.5 Scheduling and Delivery Procedure).
Show every change on the invoice.
Review change orders monthly. If the same change keeps coming up, fix your estimates or scope.

What proof to keep

Each numbered change order with approval
Photos of hidden conditions
Updated schedule notices
The invoice showing the original price and approved changes
Any notes on emergency work done before approval

Common mistakes

Saying “we’ll figure it out later.” Later is when disputes happen.
Approving changes on the phone only.
Showing only the added cost, not the new total.
Forgetting the schedule impact.
Crew members agreeing to extras on site without telling the office.
Billing for changes that were never approved.

When to get help from a pro

An attorney to review your change clause and form, especially in construction where state rules may apply. Questions to ask:

What counts as written approval in my state and trade?
How should my agreement handle emergency work?
Are there state rules on change orders for home improvement work?

Bill’s note

[Bill: add a short note. For example, how SiteSmarty handles extra requests during a website build, or a client story where a missing change order turned into a dispute.]

How I did this for SiteSmarty

[Date I did this:]
[What I actually did, step by step: the SiteSmarty change order form and approval process]
[What it cost and how long it took:]
[What surprised me or what I’d do differently:]
[Screenshot or photo to add, with private info blurred: a filled-in change order with approval]
[Result so far:]

Questions people ask

When do I need a change order? Any time the work, price, or schedule changes from what the customer agreed to, before you do the work.

Can a customer approve by email or text? Often, if the message clearly accepts the specific change. The E-Sign Act gives electronic records general validity, but ask your attorney what your state and trade require.

What if I already did the extra work? Write it up right away, explain it, and ask for approval. Without prior approval, you may not get paid.

Should a change order show the new total? Yes. Show the original price, the change, and the new total.

Audit check

Line	Question	Pass looks like	Fail looks like	Evidence to collect
11.1.5 Change order	Is every material out-of-scope change approved in writing before work?	Numbered, approved change orders on file	Verbal changes, surprise charges	Change orders and job records
17.6.1 Change identification	Does the team identify changes as they come up?	Changes written up when found	Extras discovered at billing	Job notes and change orders
17.6.2 Price impact	Is the cost of each change calculated and shown?	Change amount and new total	No price, or “to be decided”	Change orders
17.6.3 Schedule impact	Is the timing impact stated?	New dates on the change order	No schedule note	Change orders, schedule
17.6.4 Customer approval	Is approval obtained before proceeding when required?	Signed or clearly accepted first	Approval after the fact	Approval records with dates
17.6.5 Recordkeeping	Are change orders attached to the original job?	Linked to job and invoice	Loose or missing	Job file and invoice
17.6.6 Unauthorized work	Is out-of-scope work prevented without approval?	No unapproved extras, emergencies documented	Crew does extras freely	Job files, invoices, crew notes

Where this fits

Do this first: 11.1.4 Scope of Work, 11.1.1 Service Agreement

Do this next: 11.1.6 Payment Terms

Sources

Federal Deposit Insurance Corporation (FDIC) Consumer Compliance Examination Manual, "Electronic Signatures in Global and National Commerce Act" (checked October 17, 2026)
Federal Trade Commission, "How To Avoid a Home Improvement Scam" (checked October 17, 2026)
Google Business Profile Help, "Tips to improve your local ranking on Google" (checked October 17, 2026)

This page explains general rules and Bill's own experience. It is not legal, tax, or insurance advice. Talk to a qualified professional about your situation.