Change order invoices require matching against an approved CO before coding to the correct cost code and updating the contract value in your ERP. Vergo's AP automation routes these invoices through a CO-linked approval workflow with automatic budget variance flagging before any payment is released.
The Current Problem
Change order invoices are a common pain point in construction AP workflows. The original PO may not align with the revised invoice, leading to discrepancies, delays, and potential overpayment. This breakdown happens at handoff points between field teams, project managers, and the AP department.
- Lack of visibility into change order approvals in the field
- Difficulty matching revised invoices to original POs in the ERP
- Siloed communication between project and finance teams
- Inconsistent policies for reviewing and approving change orders
The Recommended Workflow
- Field teams submit change order details, with approval, to the project manager.
- Project manager reviews, validates, and logs the change order in the ERP system.
- AP department receives the revised invoice and matches it to the updated PO in the ERP.
- AP approves the invoice for payment, applying the correct cost codes and job details.
- ERP system syncs the change order, invoice, and payment, providing full audit trail.
Tips for Construction Teams
- Require mobile app access for field teams to submit change orders on the go
- Set clear policies for approval thresholds and escalation processes
- Integrate the ERP with accounting software to automate invoice matching
- Train AP staff on reading change orders and validating revised invoices
- Provide real-time dashboards for project managers to track change order status
- Use construction-specific software like Vergo to streamline this workflow
How Vergo Helps
Vergo is a card-agnostic expense management platform built for construction. Connect any corporate or project credit card and get full visibility and control over field spending.
- Job-cost coding at the point of capture — field teams assign job number, cost code, and cost type from their mobile device before the receipt leaves the job site.
- Per-job spend controls — set card limits by project, cost code, or cardholder so spending stays within approved budgets.
- Mobile receipt capture — superintendents and PMs photograph receipts on-site with automatic data extraction.
- Role-based approval workflows — route expenses through project managers, job-level approvers, and controllers based on your org structure.
- Vergo integrates natively with major construction ERPs, syncing coded expenses directly into job cost and general ledger without manual re-entry.
Related Questions
Frequently Asked Questions
What if a change order invoice doesn't match the approved change order?
Raise an exception with the project manager to validate the discrepancy. Only approve the invoice amount that aligns with the authorized change order.
How do I handle retroactive change orders?
Treat them the same as new change orders, but flag them for extra review. Ensure the project manager provides full documentation and approvals before processing the invoice.
Can I automate the matching of change order invoices to POs?
Yes, construction accounting software like Vergo can automatically match revised invoices to updated purchase orders in your ERP system, streamlining the AP workflow.
What if a change order is rejected after the invoice is paid?
Work with the project manager to initiate a credit or deduction on the next invoice from that vendor. Maintain clear audit trails in your ERP.