Using Change Orders when using the RPO Revenue Recognition Method

If the specifications for a current job change, you can create a change order to reflect the added work, or you can edit an existing change order for the job in the Change Orders window. You can also alter financial or other information specified in the job's contract. The committed, actual, estimated, forecasted costs, and billing amounts are stored, allowing you to track profitability for individual change orders. 

If you are not using the RPO Revenue Recognition Method, please see Using Change Orders.

RPO Revenue Recognition Method Change Order Rules

If you are using the RPO revenue recognition method, the updated change order rules were implemented in the Signature 2016 R3 release. The change orders that can be created are limited based on the job's contract type:

*By design, a Cost Plus NTE change order increases the overall NTE amount for the job. It is not tracked as a separate NTE change order.

Additional Information

Cost codes can also be applied to a change order. The type of contract for the job and the change order determines what type of cost code you can apply to the change order.

When you enter a change order transaction, make sure the posting date falls within the period you want the transaction to affect. The amounts in the Job Status by Period window and the Percentage of Completion (POC) will be totaled based on the posting dates.

Creating a Change Order

1. Select Inquiry > Job Cost > Job Status.
2. Select a job, then select Change Orders.
3. In the Change Order Inquiry window, select Add Change Orders.
4. Complete the following fields, as necessary.
   • Change Order, Description: Accept the default number or enter your own change order number. Enter a description to further identify the change order.
   • Status: Select a status for the change order.
   • Contract Type: From the drop-down list, select the type of calculation method to use for the billable amount of the change order. The job contract type in the Job Status window defaults.
   • Change Order Amt.: If you selected the Fixed Amount contract type, enter the amount of the change order. If you selected the Cost Plus NTE contract type, enter the change order maximum amount. If you chose Cost Plus as the billing type, you will not enter a change order amount. It will be automatically calculated, based on the cost code's profit type and profit amount, as costs are posted to the change order cost codes.
   • User-Defined: Enter user-defined information.
5. Select Save.

Adding Change Order Revenue Codes

1. Select Revenue Codes to open the Change Order Revenue Codes window.

2. Select or enter the revenue code.

   Change Order	Limit	Code Type
   Cost Plus	1	New
   Cost Plus NTE	1	Must match current job revenue code
   Fixed	1	New or existing

3. Complete the revenue code fields if you have created a new revenue code.
4. Enter the Start/End dates.

When using existing revenue codes for change orders, you can only edit the date fields.

Change Order Cost Codes Setup

1. Select Cost Codes to open the Change Order Cost Codes Setup window. 

   

   If you are using the revenue recognition method for RPOs, this button will be disabled until you create and save the change order revenue code on the change order.

2. Enter a Cost Element Type.
3. Enter a Cost Code.
   • If the contract type of both the job and change order is Fixed Amount, you can either enter a new cost code, select Add Cost Codes to add a cost code from the master cost code list, or select Use Existing Cost Codes to use a cost code already assigned to the job.
   • If the job contract type and/or change order contract type is Cost Plus or Cost Plus NTE, you can only enter a new cost code for the change order. The Add Cost Codes and Use Existing Cost Codes buttons will be disabled.
4. Complete the remaining fields. If you are assigning a cost code with a cost element type of subcontractors, you must select a transaction type of Vendor ID and assign a vendor for the change order amount to affect the Amended Contract Amount field in the Subcontractors Maintenance window. See Adding Cost Codes to a Job.
5. Select File > Print to print the Change Order Cost Codes report listing cost codes assigned to the change order.
6. Select Save in the Change Order Cost Codes Setup window and close the window.
7. In the Change Orders window, select File > Print to print the Change Order List.
8. Post or save the change order. Once the change order is posted to the job, the expected contract amount and the estimate cost will be updated in the Job Status window.

Editing a Change Order

You can edit posted or unposted change orders. Unposted change orders are edited and printed in the Change Orders window. Posted change orders are edited and printed in the Change Orders Zoom window.

1. Select Inquiry > Job Cost > Job Status.
2. Select a job, then select Change Orders.
3. You can either select a change order and then select the Change Order Number zoom or you can double-click a change order.
   • If the change order is unposted, the Change Orders window opens.
   • If the change order is posted, the Change Orders Zoom window opens. The windows are the same, except that the Change Order, Contract Type, and Change Order Amt. fields are disabled in the Change Orders Zoom window.
4. Change the Description, Status, and user-defined items.
   • If the change order is unposted, you can also change the change order number and contract type. You can only use Cost Plus NTE if the job contract type is Cost Plus NTE.
   • If the contract type is Fixed Amount, you can revise the change order amount.
5. Select Bill Codes to add or change bill codes for the job associated with this change order. The Job Bill Codes window opens. The Bill Codes button is enabled only for jobs with bill types of Cost Code or User Defined.

6. Select Cost Codes to add a new cost code or to edit cost code data for the existing change order. The Change Orders Cost Codes Setup window displays. If the change order is a Fixed Amount contract type, the Profit Type ID and Profit Amount fields are disabled. If the change order contract type is Cost Plus or Cost Plus NTE, the Add Cost Codes and Use Existing Cost Codes buttons are disabled. 

   

   Profit type ID and profit amount are password-protected.
7. Select Print to print the Change Order Audit report.
8. Select OK to save the change order.

Revising Posted Change Order Estimated Cost

If your change order is posted, you can revise the estimated cost in the Change Order Estimate Cost Revision Entry window.

1. Select Inquiry > Job Cost > Job Status.

2. Select a job, then select Change Orders.
3. Double-click a posted change order in the scrolling window.
4. Select the Cost Codes button.
5. Enter a Cost Code.
6. Select the +/- button attached to the Estimate Amount field to open the Change Order Estimate Cost Revision Entry window.
7. The system date appears in the Date field. You can change this date.
8. Revise the estimate by entering Units, Amount/Unit, and a Description.
9. To post the estimate revision, select Post. The amount and description display in the lower scrolling window.
10. To print the Change Order Estimate Revision List, select File > Print.
11. Close the Change Order Estimate Cost Revision Entry window. In the Change Orders Cost Code Setup window, select Save. Revised amounts are displayed in the Change Orders Zoom and Job Status windows.