How to Register a Change Order in QuickBooks Online?

Business projects operate as per the outlined parameters. However, project demands often vary during implementation, especially when clients request additional tasks. Consequently, projects experience unplanned costs. These unplanned modifications are categorized as Change Orders.

A Change Order registers the adjustments made to an active project. It records the changed expense, scope, and timeline, maintaining billing integrity. Recording the modifications on time helps with the project audit trail.

In QuickBooks Online, project and billing management are seamless and efficient. However, the software lacks a built-in change order feature to ensure accurate recording. Accurate recording is crucial to prevent billing errors, minimize financial losses, and ensure accurate reconciliation.

Change order tracking is supported in QuickBooks via existing tools. The confirmed changes are reflected in QuickBooks via estimates, invoices, and expenses. The workflow records all adjustments with complete data.

In this guide, complete information on change orders in QuickBooks Online has been shared. This guide elaborates on the significance of change orders and how to record them in QuickBooks Online.

Describe a Change Order in QuickBooks Online

A change order in QuickBooks Online registers the confirmed changes to an active project or contract. In simple words, a change order records the additional work, captures key changes, and updates pricing changes.

QuickBooks Online handles change orders via revised estimates. Users change the original estimate to display the requested adjustments. The revised estimate enables precise project monitoring and supports customer awareness.

Steps to Create a Change Order in QuickBooks Online

QuickBooks Online lacks an integrated change order option and requires an updated estimate. Here are the steps to create an updated estimate and generate a change order in QuickBooks Online:

1. In QuickBooks Online, click the “Sales” tab.
2. Choose the “Estimates” option.
3. Look for the customer estimate.
4. Access the estimate and choose the “Edit” button.
5. Add, erase, or change prices and items.
6. Register notes based on the adjustments.
7. Save the revised estimate.
8. Send the updated estimate to the client.

Note: These steps register the change order, maintain billing integrity, and complete an audit record.

Steps to Register a Change Order in QuickBooks Online

Change order secures revenue for the business by documenting verified scope adjustments. Here are the steps to register a change order in QuickBooks Online:

1. Revise the Original estimate

The original estimate works as the project framework. Changing the original estimate retains scope records and maintains accurate pricing.

Here are the steps to update the original estimate:

• On the left navigation menu, click the “Sales” tab.
• Choose the “Estimates” option.
• Find the estimate that needs adjustments.
• Access the estimate and include a new line item. This new line item is crucial for the change order.
• Apply a clear description to the line item.
• Add the description and cost.
• Check the revised total.
• Choose the “Save and Send” option. Customer consent verifies the revised cost and scope.

2. Change the Revised Estimate to an Invoice

QuickBooks Online changes the approved estimates into invoices or bills. Here are the steps to generate the invoice:

• Access the revised estimate.
• Choose the “Create Invoice” option.
• Select all items. Alternatively, select only change order entries.
• Confirm the item description and cost.
• Ensure the change order items are labelled properly.
• Save the invoice and send it.

Note: This procedure registers extra work and ensures precise billing.

3. Implement Progress Invoicing for Partial Payments

Progress invoicing facilitates partial payments for work billed in stages. Here are the steps to use progress invoicing:

• Click the “Settings” option.
• Choose the “Sales” button.
• Allow Progress Invoicing.
• Using the estimate, prepare an invoice.
• Choose a percentage or a selected line item to invoice.

4. Document the Team Notes

Internal staff need transparency into scope modifications. QuickBooks Online helps to create internal notes via memo fields. The record change order information, access the Memo field on estimates or invoices.

When changes are documented, it boosts internal checks. Supported files to document notes include PDFs and scanned files.

5. Verify Project Expenses

Change orders boost project expenses, so monitor all concerning costs. Document material purchases and subcontractor expenses in QuickBooks Online. Once done, connect them to the change order. This guarantees expenses reflect the changed invoice and estimate, allowing accurate profit recording.

Advantages of Organized Change Order Management in QuickBooks Online

Proper change order management secures financial precision and helps avoid income leakage. In addition, documenting change orders helps minimize customer conflicts and promotes accurate reporting.

Here are the key benefits of Efficient Change Order Management:

• Improved Project Clarity

Well-defined change order records notify all the shareholders. They record scope modification and indicate cost implications. This monitoring guarantees project ownership.

• Precise Financial Reporting

Integrated change orders ensure consistency between invoices, estimates, and expenses. This guarantees precise records for budgeting. Verified data from such records enables strategic business decisions.

• Customer Satisfaction

Clear change order communication creates trust and boosts client reliability. Updates verified by clients prevent misunderstandings and potential disputes.

Tips to Manage Change Orders in QuickBooks Online

Adhering best practices to manage change orders guarantees steady tracking and invoicing. Here are the practices to make billing accurate and protect project records:

• Generate revised estimates for every change order.
• Include comprehensive notes to avoid confusion.
• Save verified changes in QuickBooks Online.
• Keep the original estimate the same.
• Apply a clear label to every change order.
• Get customer consent prior to work.
• For precise billing, connect invoices to revised estimates.

This guide shares complete information on how to register a change order in QuickBooks Online. All the steps and solutions have been shared in this guide.

Still, if there is any confusion or doubt, feel free to reach out to our QuickBooks experts. Our experts have years of experience in handling QuickBooks-related queries and doubts.

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