Billing & AR

What is change order?

Definition

A written amendment to a construction contract that changes its scope, price, or schedule after the contract is signed.

Why it matters financially

Unapproved change orders are one of the biggest sources of margin leak. Work gets done, costs hit the job, but the contract value hasn't moved, so the job looks like it's fading.

Track pending and approved change orders separately on the WIP so you can see both the conservative and expected outcome for each job.

Underbilling

Costs and estimated earnings in excess of billings: you've earned more than you've invoiced on a job. It's recorded as an asset on the balance sheet.

WIP schedule

A work-in-progress schedule lists every open job with its contract value, costs to date, estimated cost to complete, billings, and the resulting over- or underbilling.

Schedule of values

A breakdown of the contract sum into line items, each with a value, used as the basis for progress billing.

Guides that cover this

Reporting & WIPAug 26, 2026

Overbilling vs. Underbilling: What Your WIP Is Telling You

Over and underbillings aren't just accounting adjustments. They're signals about cash, billing discipline, and jobs that are quietly losing money.

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