Often more than you would guess, because small field changes get done and never billed. In our example, an $11M contractor that misses 15 changes a year at about $6,000 each loses roughly $90,000 of revenue it already earned.
The rule of thumb: if a change is not recorded the day the customer asks, it often never gets billed.
The problem: Small field changes get done but never reach a change order or invoice, so an $11M contractor can lose about $90,000 of earned revenue in a year.
The solution: Record each request on site when it happens, then give the project manager ownership of pricing, approval, and billing.
Worked example (illustrative numbers, not a client result)
Say a contractor does $11M a year with four superintendents.
- Field changes done but never billed: 15 a year
- Average value: about $6,000
- Lost revenue: 15 × $6,000 = about $90,000 a year
The math
Fifteen unbilled changes × $6,000 each = about $90,000 of earned revenue to check in this illustrative year.
This is revenue, not profit. But the crew hours and material are already paid for, so most of that $90,000 would have dropped to margin. Your numbers will differ. Use your own count and your own average ticket.
Where the money goes missing
A customer walks the site and asks for something. Move the panel six feet. Add two outlets. Core one more hole while the gear is here. The superintendent says yes, because yes keeps a good customer. The crew does the work.
On site, that is the end of it. Everything that turns the work into revenue was supposed to happen later, in the office, by someone who was not there.
Most contractors have a change order form and a rule: no extra work without approval. The rule is fine. The trouble is the handoff.
- The super flags the changes he thinks are big enough.
- The project manager hears about some of them, often on a call about six other things.
- The coordinator writes up paperwork when the PM asks.
Nobody owns the change that never got mentioned.
Why the small changes cost the most
A $40,000 change gets written up. It is too big to ignore.
A $3,000 change often does not. It is faster to just do it. Weeks later, there is no signature and no photo, and the customer half remembers. The PM eats it rather than fight over $3,000. That makes sense once. It gets expensive when it happens again and again and nobody counts it.
Why no report catches it
The costs record perfectly. Crew hours hit the job through payroll. Material hits it through the purchase order. The revenue never shows up, because no invoice was made. The job just looks a little light, and no report can flag an invoice that never existed. That is also why whole-job margin is so hard to see.
How to check your own jobs
- Ask the field, not the file. Walk six finished jobs with your supers. Ask what was done that was not bid.
- Compare. Put their list next to your change order register.
- Sort the gap by size. If the misses sit under $10,000, your form is fine. Your capture point is wrong.
- Count and multiply. Missed changes per job × jobs per year × average ticket. That is your own number.
Where AI and automation help
More rules will not fix it. Make recording a change easier than skipping it.
- Record it on the spot. The super takes a photo and a 10-second voice note. AI turns that into a draft change on the job with the date, place and who asked. He does not price it.
- Give every draft an owner. The PM prices it and sends it, or writes it off on purpose. It is never just forgotten.
- Let automation chase it. The system asks for a price, follows up on unsigned changes, and flags any draft still open after five days.
The limits
- AI can't record a change nobody mentions. Someone on site still has to take the photo.
- It does not decide what to charge. The PM does.
- Some changes should be written off to keep a good customer. The goal is to choose that on purpose, not to lose them by accident.
- A website scan can't see your job files. It shows where to look, not what you lost.
Is this an accounting problem?
No. Accounting can only bill what it hears about. This is a field-to-office workflow problem, and the fix starts with the person who said yes.
Want to see where cash like this may be slipping through your business?
Related reading
- Landscapers face the same leak with extras that never reach an invoice.
- Long weeks add their own cost: what overtime really costs.
- See how much of your own team's time never reaches an invoice with the unbilled work calculator.