Change Order
A formal modification to a construction contract that changes the scope, cost, or timeline of work.
Definition
A change order is an amendment to an existing construction contract authorizing changes to the scope of work, contract price, schedule, or other terms. Change orders must be approved by the owner and contractor before additional work begins, and they modify the original schedule of values for billing purposes.
Why It Matters
Unauthorized or poorly tracked change orders are a leading cause of construction cost overruns and disputes. AP must verify that invoiced work corresponds to approved change orders.
Examples
Scope addition
Owner requests additional electrical outlets. A change order adds $8,000 to the contract for the extra work.
Invoice validation
AP receives an invoice for $12,000 in "extra work." The system checks for an approved change order before processing payment.
How Nexus AP Helps
Nexus AP tracks approved change orders and matches invoices against them, preventing payment for unapproved scope changes.
Start Free TrialFrequently Asked Questions
What triggers a change order?
Design changes, unforeseen conditions, owner-requested additions, code requirement changes, or errors in the original scope.
Can a subcontractor bill without an approved change order?
They should not. Best practice requires a signed change order before any out-of-scope work begins or is billed.
Category
constructionRelated Terms
Deep Dive Guides
The Construction AP Controls Framework
A working controls framework for construction payables: segregation of duties, vendor bank-change verification, commitment tolerances, approval authority, waiver and retention gates, and what should never post automatically.
Construction Job Costing
Construction AP workflow and product guidance.
Construction Accounts Payable: The Complete Operations Guide
How construction AP actually works — the invoice lifecycle from receipt to coded posting, the roles involved, the exception taxonomy, and the metrics that tell you whether the function is healthy.
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