Understand the difference between adjustments and change orders within ConstructionOnline's powerful financial toolkit
Because the construction industry is high-stakes, it is crucial for construction companies to be able to accurately price jobs so that they can reduce risks, cover costs, and maximize profits. When job costing in ConstructionOnline, a common question new users have is: What are Adjustments in OnCost Estimates, and how are they different from Change Orders? While both store information related to adjusted costs on construction projects, their intended functions are different. To ensure your jobs are always priced for profit, make sure your team understands the difference between the two.
Estimate Adjustments
Adjustments in ConstructionOnline OnCost Estimates are used to factor in additional costs or cost changes without affecting the total price seen by the Client. Since they do not affect the Contract/Client Price, they are primarily used for internal reference and reporting.
A good example of when to utilize Adjustments in ConstructionOnline is when a bid from one of your subcontractors comes in under the estimated Base Cost. By noting the difference within the Adjustment column, you can ensure your profits are maximized while maintaining accurate financial records.
Both positive and negative values can be entered into the Adjustment column. The data entered into the Adjustments column is factored into the Adjusted Cost calculation, which is the sum of the Base Cost + Tax + Adjustment + C.O. Cost columns. Adjustments do not affect Invoicing or Payments and do not require approval or accounting transactions.
Change Orders
A Change Order is a document used to alter the scope of work agreed upon in the original contract of a construction project. This could look like the addition of a room to a residential project, an overage in the budgeted allowance for kitchen cabinets, or unexpected changes in local building codes that require modifications to the original project design.
While the reason(s) for a Change Order may vary, as a rule of thumb, if the additional cost is something that the Client will be paying, a Change Order is warranted. This will ensure that the cost is factored into the Client Price and will not eat into your business' profits. It also ensures that you can trigger Invoices, Payments, and accounting transactions for the additional costs.
Change Orders can be linked to OnCost Estimate Subcategories from within both OnCost Estimates and ConstructionOnline's Change Order feature. If linked, Change Order data will populate within the C.O. Cost column and will be utilized to calculate the Adjusted Cost (the sum of the Base Cost + Tax + Adjustment + C.O. Cost columns) and C.O. Price (total Client Price of all Change Orders linked to Subcategory; populates automatically from Change Order Details). Change Order data can also be viewed within the Change Order tab at the end of your OnCost Estimate.
Tips & Tricks
- Don't see the Adjustments, C.O. Cost, or Adjusted Cost columns on your Estimate? Learn how to quickly & easily show and/or hide Estimate Columns here.
- Unsure of the purpose or calculation behind the Columns shown on your Estimate? Hover over the Column header to view how the Column is calculated or the intended function of that Column.
- For more information about OnCost Estimate Column Views, visit the Understanding OnCost Estimate Column Views article.
HAVE MORE QUESTIONS?
- Frequently asked questions (FAQ) regarding OnCost Estimating can be found in the FAQ: Estimating article.
- Frequently asked questions (FAQ) regarding Change Orders can be found in the FAQ: Change Orders article.
- If you need additional assistance, chat with a Specialist by clicking the orange Chat icon located in the bottom left corner or visit the UDA support page for additional options.