Change requests: where projects quietly lose their margin

There is a particular kind of project that returns noticeably less than planned without anyone being able to say why. Nothing went wrong. There was no argument, no delay, no mistake. It was just all a little more than expected.

That «little more» has a name. It is change requests that never became change requests.

How extra work builds up

Almost always the same way: not as an event, but as a series of small things, none of which seems worth mentioning on its own.

The client calls and asks whether you could just quickly do it slightly differently. The contact person changes and wants the concept explained again. The file arrives in a format that has to be converted first. There is a third round of revisions when two were agreed.

Each of these costs half an hour to two hours. Each one is too small to start a discussion over. And together they are thirty hours on a project costed at a hundred.

Why extra work is rarely raised

The reasons are all understandable, which is exactly what makes them dangerous.

It feels petty. Opening a change-request conversation over ninety minutes feels disproportionate, especially with a client you get on with.

The timing is never good. Mid-project you do not want to break the momentum. At the end it is too late, because the work has long since been delivered.

You are not certain. Was that a change or a clarification? Is it in the proposal, or only something similar? Anyone who cannot answer that immediately tends to say nothing.

And it does not show up. Without project-level time recording, nobody notices that a hundred hours became a hundred and thirty. Job costing reveals it - months later, when nothing can be done.

What unbilled extra work actually costs

Thirty unbilled hours on a project costed at a hundred take the margin from 30 per cent down to 9. The arithmetic:

A project is costed at 100 hours at €90, so €9,000. At a labour cost rate of €63 the cost is €6,300 and the margin €2,700, or 30 per cent.

Now add 30 hours of extra work that nobody invoices:

Thirty per cent has become nine. And as set out in the piece on hourly rates: with a 25 per cent overhead surcharge, break-even sits at roughly 20 per cent project margin. So this project did not carry the business - even though nobody made a mistake and the client was happy.

Put the other way round: billing 20 of those 30 hours would have brought in €1,800 more. That is more than most firms achieve with a price increase over a full year.

How to get change requests paid without losing the client

Describe the scope so that deviation becomes visible. «Concept and delivery» cannot be exceeded, because it has no boundary. «Concept including two review meetings and two rounds of revisions» has one - and when the third round arrives, that is no longer a matter of interpretation but a fact.

This is the single most effective item on the list, and it costs ten minutes when writing the proposal.

Raise extra work when it arises, not when it hurts. The sentence does not have to be hard. «We can do that - it is about three hours on top, I will add it to the change request» is a statement, not a confrontation. Almost every client says yes. Friction does not come from change requests; it comes from change requests the client first hears about on the final invoice.

Book hours to the project, not to the client. Knowing that someone spent eight hours on Meier Ltd tells you nothing about which project is running over. That link is the difference between «we are busy» and «project 24 is at 130 per cent».

And look while it runs, not afterwards. At 60 per cent of the time spent and 40 per cent of the work delivered, you can still act. After sign-off you can only observe.

The special cases

Fixed-price work. Here the revenue is set, so every extra hour comes straight out of the margin. That makes scope description not merely important but existential. Without a clear boundary, a fixed price is an unlimited commitment at a limited price.

The long-standing client. This is where raising it feels hardest and pays off most - usually years of unpaid courtesies have quietly accumulated. The route out is not a claim for past work, but the next proposal with a clearly stated scope.

Your own mistake. If the extra work exists because you overlooked something, it is not a change request. That one you carry - and put into the costing of the next similar project.

How to start with change requests

Take the last completed project and estimate how many hours in it were neither costed nor billed. Most firms land at ten to twenty per cent, having never measured it.

Put one number in the next proposal that draws a line: meetings, revision rounds, pages, square metres - anything countable. A single number is enough.

And raise the next piece of extra work the moment it appears. Not to argue, but to record it. You will be surprised how rarely anyone objects.

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In Pulse you can see recorded hours per project against the costed scope at any time - not only in job costing afterwards. Change requests become their own line items in a quote or directly in an invoice, linked to the project.