A change order is the paper trail for the sentence "while you're in there, could you also…" It names the change, prices it with markup, states any schedule impact, and carries both signatures. Without one, the extra work is a gift and the extra cost is the contractor's. With one, the contract value moves and the job's margin stays where it was bid. Most contractors lose more to unwritten change orders than to bad estimates.
A worked number
Kitchen contract $68,000. The client adds a pantry wall and moves a switch: $2,400 in cost. Priced with the job's 25% markup, the change order is $3,000 and the adjusted contract is $71,000. Done as a favor, the $2,400 comes out of a $20,300 margin, and the switch gets moved again at the walkthrough for free.
The mistake it hides
Waiting to batch them. A change order written the day the change is agreed takes five minutes and gets signed; three of them presented at the final invoice take an hour and get disputed. The other mistake is pricing at cost: an extra carries the same overhead and risk as the original scope.
In Obra
Change orders are logged per project with their date, amount and attachment; the original contract value stays visible and the adjusted value drives what's left to collect. The change order guide is the five-minute version, and the pricing calculator applies the markup.