# Change Orders: Where Contractors Quietly Lose Money

> Change orders rarely lose money in one big fight. They leak through verbal okays, unpriced extras and thin paperwork. Here is the one rule that stops most of it, and how to get every approved change onto an invoice that gets paid.

*By AltaMatic Team · Published 2026-11-10 · Updated 2026-11-10 · 6 min read · Category: Finance*

Contractors lose money on change orders in the gap between the field and the invoice: extra work starts on a verbal okay, nobody prices it before the crew is already doing it, and by billing time the paperwork is thin enough that the owner disputes it or it never gets billed at all. The fix is not a better form. It is one rule, that no extra work starts without a written, priced and approved change, and a way to carry every approved change straight onto the next invoice.

## How the Money Leaks

Change orders rarely lose money in one big argument. They leak in small ways that each feel reasonable on the day:

- A superintendent agrees to an extra on site to keep the job moving, and the office hears about it a month later.
- The crew does the work before anyone prices it, so the price becomes a negotiation after the fact.
- Approval is a text or a phone call, with no record of what was agreed or who agreed to it.
- Small extras are not worth the paperwork on their own, so they are never written up, and twenty of them add up.
- The approved change sits in an email and never makes it onto the progress invoice.

## The Rule That Stops Most of It

No extra work starts without a written change that describes the work, carries a price or an agreed pricing method, and is approved by someone with the authority to approve it. That is the whole rule, and it protects you more than any contract clause you never enforce.

Sometimes the work cannot wait for a priced change: water is coming in, or the schedule will slip. For those cases, agree in advance on a change directive, where the owner approves the work and the pricing method, usually time and materials at agreed rates, and the price is settled from the records. The rule still holds: nothing starts without written approval.

This is practical operations guidance, not legal advice. Your contract governs how changes are requested, priced and approved, so read it, and talk to a construction lawyer about anything in dispute.

## Getting Approved Changes Paid

An approved change is only worth something once it is invoiced and paid. In Alberta, the Prompt Payment and Construction Lien Act and the Government of Alberta's prompt payment guidance run the clock from a proper invoice: the owner has 28 days to pay, an owner who disputes an amount must give a notice of dispute within 14 days, and a contractor generally pays its subcontractors within 7 days of being paid. We cover those rules in more depth in our post on Alberta prompt payment rules.

The practical lesson is to bill approved changes on your regular proper invoice, with the signed change attached and the revised contract value shown, rather than chasing them separately at the end of the job. A change that is clearly documented and billed on time is much easier to collect than one that surfaces at close-out.

## What the Field Needs

Most changes start in the field, so the capture has to happen there, on a phone, in a couple of minutes:

- What changed, in plain words, with photos
- Who asked for it and who approved it, by name
- The price, or the agreed pricing method plus time and materials as they are used
- An approval the owner's representative can give on their own phone, with a timestamp
- No signal needed: it saves on the phone and syncs when it is back in range

## What to Watch Every Month

A short monthly review tells you whether the leak is closing:

- Changes raised, approved, rejected and still pending
- Value approved versus value invoiced versus value collected
- Average days from request to approval
- Extra work done before approval, which should trend to zero
- Disputed amounts, each with its reason

## Where AltaMatic Fits

AltaMatic (formerly AltaPro AI) builds field-to-office systems for contractors: changes captured and approved on site, priced against the contract, carried onto the next progress invoice and tracked until they are paid. The construction scope is at /software-for-construction, and the map at /tools/job-to-cash-map walks a job from quote to payment so you can see where changes fall through.

## FAQ

### Is a Verbal Approval Enough for a Change Order?

It is the most common way change orders go unpaid. Even when the work has to start immediately, get the approval in writing, as a signed directive or a timestamped approval on a phone, before the crew starts. Your contract sets the formal requirements.

### Should Small Changes Be Written Up Too?

Yes. Small extras are where most of the money leaks, because each one feels too small for paperwork. Capturing them on a phone takes a minute, and grouping them on the next invoice keeps the admin light.

### When Should Approved Changes Be Invoiced?

On the next regular progress invoice, with the signed change attached and the revised contract value shown. In Alberta the payment clock runs from a proper invoice, so changes billed late are paid late. This is practical guidance, not legal advice.

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Source: https://www.altamatic.ca/blog/change-orders-where-contractors-lose-money · AltaMatic (formerly AltaPro AI), an Edmonton software development company. Free 30-minute call: https://www.altamatic.ca/#audit