How to invoice for variation orders and extras on a job

Introduction to variation orders

A variation order (VO) represents any change to the agreed scope of work, materials, or specification within a project. Whether initiated by the client or an unforeseen necessity, understanding how to correctly invoice these variations ensures you are protected financially and legally.

Why variation orders are important

When clients request changes mid-job, having a VO in place protects against unexpected costs and workload. Without this formal agreement, you risk complications with payment and project completion.

Handling a variation before starting extra work

Before commencing additional work, ensure it's documented. Obtain a written agreement detailing costs and time implications. This might be through a revised contract or an addendum.

Steps to take

• Get changes in writing
• Confirm costs and timelines
• Seek client signatures on all documents

Elements of a variation invoice

When invoicing for a VO, include the original contract reference, VO number, a detailed description of changes, the agreed price, and any impact on the completion date.

Free written variation order template

Here's a basic template for a written variation order:

<h3>Variation Order Template</h3>
<p>Date: [Date]</p>
<p>Original Contract Reference: [Contract Number]</p>
<p>VO Number: [VO Number]</p>
<p>Description of Change: [Details of Change]</p>
<p>Agreed Price: [Price]</p>
<p>Impact on Completion Date: [New Completion Date, if applicable]</p>
<p>Client Signature: ______________________</p>
<p>Contractor Signature: ______________________</p>

Invoicing variations

When preparing invoices, you can either list changes as separate line items or issue a separate invoice depending on your preference and the project's complexity.

What happens if you do extra work without a signed VO?

Without a signed VO, you face the risk of not getting paid. A lack of agreement makes it difficult to enforce payment for the additional work.

Verbal agreements: why they're risky

Verbal agreements can lead to misunderstandings. Document these interactions with follow-up emails or messaging apps like WhatsApp to maintain a reliable record.

Dealing with late variations

Clients might introduce changes late in the project. It's crucial to issue a VO promptly and require client approval before undertaking any extra work.

Preventing disputes

Maintain a job diary with photos and signed VO logs. These records become invaluable if disputes arise. Ensure that everything is dated and compiled orderly.

For further guidance on construction contracts, consider consulting the Federation of Master Builders or JCT website.

Frequently asked questions

• What is a variation order?

  A variation order is a formal amendment to a construction contract detailing additional work or changes to existing terms.

• Why must VOs be signed?

  A signed VO ensures both parties agree to the change, protecting the contractor from unpaid work risks.

• How do I manage a late variation?

  Issue a VO quickly, agree on terms with the client, and get the amendment signed before proceeding.

• What if a client refuses to sign a VO?

  Do not start work on the changes without a signed VO. Try negotiating or consult legal advice if required.

Explore our invoice generator tool to simplify your invoicing process. For more insights into quoting, read our article on how to write a quote for building work.