How to Create Change Orders in Xactimate the Right Way
A change order is any change to the scope of work agreed to by the contractor and customer.
In the insurance industry it is typically an upgrade or a downgrade to an already approved item of repair.
For example, if a customer intends to change existing damaged carpet in 4 rooms of the house to hardwood the upgrade in material and labor costs represent the change order.
So, how do you correctly do this?
- Duplicate the existing estimate and rename it with the ending – CO for change order. If Jones is the customer name, you can simply rename the duplicated estimate as Jones – CO clearly identifying it as a change order.
- Go through the entire estimate deleting every item that do not relate to carpet and pad. In the room select a single line item with a left mouse click, select Ctrl A to select all line items in the room, and then select Ctrl and left mouse click to deselect carpet and pad, and then hit delete. All line items in the room will be removed BUT carpet and pad. It takes just seconds in each room to do this.
- Next click on the carpet line item and select the button containing unit of cost. For carpet it will be approximately $2.25 depending on where you’re located. A new window will open to the right of the page where you can change the radial from Line Item to Credit Line. Hit the OK button to the left of the newly opened window and the line item will turn red indicating it is now a credit item.
- Do the same for pad and do this in every room where carpet is to be replaced by wood flooring.
- In each room now add the Category, Selection, and Activity code to add engineered hardwood flooring. To add/replace engineered wood the line item entry would be FCW LAMTD +. Next enter your Calculation code or manually enter the square footage. Hit OK.
- Do this for every room where engineered wood is to replace carpet and pad.
- Xactimate automatically calculates the difference in pricing between carpet and pad and engineered wood, and can be seen in the lower right corner of the Xactimate screen. If the number is a positive one it represents what the customer is required to pay for the upgrade. If the change order is a downgrade the number will be a minus and represents a credit to the customer.
- Have the customer sign the final document indicating approval and your change order is complete.
It’s just that simple! This procedure can be used for any number of changes to an existing estimate, and there is no need to separate each change into multiple Xactimate documents.
Keep in mind that Supplements represent charges directly related to the scope of loss and damages and are covered by insurance, while the Change Orders are discretionary changes made by the customer for which they are personally responsible for the costs.
Reference: 3-Month Coaching Plan – The Estimator Extraordinaire: Creating Excellence and Higher Profits in Estimating
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