Introduction: In the fast-paced world of construction, it's easy to overlook some administrative details in the eagerness to start new work. However, obtaining signatures on change orders is one step you should never skip. In this blog post, we’ll explore why this practice is crucial for avoiding misunderstandings, legal disputes, and financial losses. Insights from our recent video with Jon Markee, your Builder CPA, will help you understand the importance of this critical step.
Clear Communication: Imagine you have a homeowner who requests a $30,000 change in their house. You’re eager to get started, so you order materials and schedule your team, only to realize you never got a signed change order. This can lead to frantic emails and disputes when the homeowner claims they never agreed to the changes. Securing a signature ensures that all parties clearly understand and agree on the modifications, preventing misunderstandings and disputes.
Legal Protection: A signed change order serves as a legally binding document, protecting your business in case of disagreements or claims. It provides concrete evidence of the agreed-upon changes, safeguarding you against potential legal issues. Spending a few minutes to get a signature can save you significant time and money in the long run.
Accurate Billing and Payment: Without a signed change order, billing for additional work can become complicated and contested. By securing signatures, you ensure that you can accurately invoice for the extra work and receive timely payments. This practice also protects your cash flow, as disputes over unsigned change orders can lead to payment delays and financial strain.
Effective Project Management: Change orders can impact project timelines and resource allocation. Having a signed change order allows you to effectively manage and schedule the additional work, ensuring the project stays on track. It helps you allocate resources efficiently and avoid delays in other parts of the project.
Customer Satisfaction: Sending a bill for a change order that wasn’t signed can frustrate your clients and damage your reputation. Obtaining signatures demonstrates professionalism and transparency, building trust and enhancing customer satisfaction. Happy clients are more likely to refer your services and return for future projects.
Conclusion: Getting signatures on change orders is a simple yet powerful practice that can prevent a myriad of issues in your construction projects. It ensures clear communication, legal protection, accurate billing, effective project management, and enhanced customer satisfaction. For more insights, watch our latest video where Jon Markee, your Builder CPA, explains the importance of this essential step.
By prioritizing this practice, you can protect your business, streamline your processes, and build stronger relationships with your clients.