FREE CONTRACTOR TOOL

Change order impact calculator

Compare the whole job before and after a proposed change. Check your chosen gross margin target before agreeing to the new scope.

SCENARIO INPUTS

Set up the comparison

Currency

Changing the code relabels amounts; it does not convert them.

1 Current job, before this change

Use the same tax basis throughout. Include approved changes in today's contract revenue; leave this pending change out.

Approved contract revenue

Base contract plus approved change orders.

Actual net costs

Costs incurred, net of credits. Include unpaid costs already received.

Open commitments

Only the amount not already included in actual costs.

Remaining cost estimate

Uncommitted work still expected on the current scope.

2 Proposed change, not yet approved

Enter the change's revenue and incremental cost. Do not include costs already in the current-job amounts above.

Price to customer

Use a negative amount for a customer credit or scope reduction.

Additional cost impact

Use a negative amount when the change reduces cost.

Target gross margin for the whole job

A planning target, not a guarantee or industry benchmark.

THE METHOD

A price floor for the whole job.

Whole-job price floor = ceil-to-cent(scenario cost ÷ (1 − target margin)) − approved revenue

Scenario cost adds the change’s incremental cost to actual costs, open commitments and uncommitted work remaining. The calculation requires at least one cent of scenario revenue to define a margin.

Worked example

$54,000 approved revenue − $36,500 forecast cost = $17,500 gross profit. A $6,000 price and $4,000 additional cost produce $60,000 revenue, $40,500 cost and $19,500 gross profit: a 32.50% margin.

A floor is not a quote

At a 30% target, the whole-job floor is $3,857.15. That is below the new scope’s $4,000 cost: it uses existing margin cushion and would reduce total gross profit. Compare this with pricing the change itself at a 30% margin: $5,714.29.

Can I enter a customer credit?

Yes. Enter a negative change price for a credit and a negative cost impact for genuine savings. The tool rejects a cost forecast below costs already incurred plus open commitments. Reconcile cancelled commitments before using them as savings.

Does this include overhead or taxes?

Only amounts you explicitly include. Use a consistent tax basis and reconcile overhead separately. The output is a gross planning estimate, not net profit or a recommended commercial price.

Read the complete change-order example ↗