Business projects do not go exactly as planned and sometimes, a client might ask for extra work or an unexpected expense might come up. In fields like construction, creative freelancing, or even consulting, these alternative routes usually come under a change order.
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If you’re using QuickBooks Online to manage your projects, you might be wondering how to handle these change orders in your workflow. Because, if they’re not recorded properly, you could end messing up your billing, lose money, or confuse yourself later when trying to track down what happened and why. The good news is even though QuickBooks Online doesn’t have an option of “Change Order,” there’s still a smooth way to register them using tools already built into the platform.
What Is a Change Order?
A change order is a written agreement that modifies the original terms of a project. This could mean adding tasks, cancelling part of the work, changing materials, or adjusting how much something will cost. It might also include new deadlines or delivery dates. While it might sound like a small detail, logging these makes a lot of difference.
Step-by-Step: How to Register a Change Order in QuickBooks Online
QuickBooks Online doesn’t include a specific change order feature, but that doesn’t mean you’re stuck. You can handle change orders neatly by modifying existing documents like estimates and invoices.
Step 1: Update the Original Estimate
If you started your project with an estimate, that’s your baseline. When things change, you’ll want to edit that same estimate instead of starting a new one from scratch.
Here’s how:
- In QuickBooks Online, go to the Sales menu and click on Estimates.
- Locate the estimate related to the project.
- Click Edit to open it.
- Add a new line that describes the added or removed task. Be clear mention this is a change order and list any new costs or adjustments.
- Save your changes.
- Send the updated estimate to your client so they can approve it.
This method keeps your paperwork clean and shows exactly how the project has evolved over time. Plus, when the client gives you the green light, you’ve got a solid record of what was agreed to.
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Step 2: Convert the Updated Estimate to an Invoice
Once your client signs off on the new changes, it’s time to move from planning to billing.
You can convert the modified estimate into an invoice:
- Open the estimate and click Create Invoice.
- QuickBooks lets you pull in all items or just the newly added lines.
- Confirm that everything looks right. You might want to label the new work clearly as “Change Order” to avoid confusion.
- Save and send the invoice to your client.
This helps ensure you get paid for the extra work while keeping everything connected in your records.
Step 3: Use Progress Invoicing If Needed
If your project is ongoing or paid in stages, QuickBooks Online offers progress invoicing, a feature that lets you bill as work gets done.
To use it:
- Enable progress invoicing from the settings > Sales tab.
- Then, when you create an invoice from an estimate, QuickBooks will ask how much you want to bill either a percentage of the total or specific line items.
This works great if a change order increases the scope, and you don’t want to invoice for the whole amount at once.
Step 4: Keep Internal Notes for Your Team
Sometimes, it’s not just about billing your internal team needs to know what changed, too. Inside QuickBooks, you can use the “Memo” field on estimates or invoices to add a brief note about the change order. That way, if someone else picks up the project later, they can quickly get up to speed.
You can also attach a copy of the signed change order document (like a PDF or scanned form) directly to the estimate or invoice for easy reference.
Step 5: Reconcile the Project Costs
Finally, don’t forget to track any new expenses tied to the change order. If you had to buy extra materials or hire subcontractors, log those in QuickBooks as usual but now they’ll line up with the updated invoice and estimate.
This way, your profitability reports will be accurate, and you won’t accidentally eat those extra costs.
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Why It Matters to Do It Right?
Getting change orders properly recorded in QuickBooks Online isn’t just about looking professional. It helps your business stay financially healthy. Every time you forget to document a change, you’re putting yourself at risk of lost income, miscommunication with clients, or messy reports when tax season rolls around.
By using estimates and invoices smartly, you can build a clean, reliable record of every project even the ones that didn’t go exactly to plan.
Properly logging a change order might seem like a small thing, but in business, it’s the small things that keep everything running smoothly. With QuickBooks Online, you’ve got the tools you just need to use them the right way.
