Change Orders and the Receivables They Strand

Change orders are where earned revenue quietly goes missing. The crew does the extra work, the formal change order trails behind, and until it is approved and billed it is cash you have spent but cannot collect. On a busy job the paperwork lags the labor, and the receivable that should exist simply does not yet.

Why change-order cash strands

The work happens in the field; the billing happens in the office, and the two fall out of sync. A change order can sit unapproved while the job moves on, get bundled into a later application where it is easy to dispute, or simply never get billed because nobody tied it back to a number. Each pattern leaves real, earned dollars off your aging.

Closing the gap

• Track change orders as receivables-in-waiting, with an owner and an expected approval date, the moment the work is authorized.
• Push for written approval early, while the work is fresh and the relationship is warm, not at closeout.
• Bill approved change orders promptly and follow up like any other invoice.

An AR agent can flag the change orders that are authorized but unbilled, surface the ones stuck in approval, and draft the follow-up, so work you have already performed turns into cash instead of aging out of memory.

This article is general information, not legal or contract advice. Change-order and billing rights vary by contract.