225 - 10 Ways to Boost Profit with Small Changes
The Cash Flow Contractor
Mastering Change Orders for Better Project Management
Change orders are often mishandled in project management, leading to misunderstandings and loss of profitability. It is crucial to document change orders comprehensively, including the date, project description, pricing adjustments, and any terms regarding payment and timeline impacts. Change orders should be in writing and signed to prevent disputes since memory can fade over long project durations. Furthermore, it's essential to charge a premium for change orders due to the disruption they cause, which may affect scheduling and profitability across multiple projects. Successful companies emphasize strict adherence to documented change orders, ensuring that any alterations are approved and require additional fees to manage risk and maintain profitability. Implementing a robust change order process is vital for increasing profit margins and clarifying scope changes with clients.
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