Variations go unbilled when there's no single place that follows each one from the moment it's agreed on site to the moment it's invoiced. The work gets done, the cost gets absorbed, and nobody ever bills the client. The fix starts with a variation register that every variation goes into, with someone responsible for checking it against invoices every week.
How variations fall through the cracks
Most builders have lost money on a variation that never reached an invoice. It usually happens in one of three ways:
- Never documented. The variation gets agreed on site, in a conversation or a quick text, but never written down.
- Site knows, office doesn't. The site team knows about the variation, but the information never reaches the people who do the billing.
- Tracked but not followed up. It's logged somewhere, but nothing flags that it hasn't been invoiced yet.
Same result every time: you wore the cost and the client never paid.
There's also a contract risk. Most building contracts set out how variations must be requested and approved, usually in writing. A variation that wasn't documented properly is much harder to claim, and much harder to defend if the client disputes it.
Start with a variation register
There's a bigger conversation to have about variation management. But start with one thing: a central register that tracks every variation from request through to invoice.
A useful register has one row per variation and these columns:
- Variation number and job
- Date raised and who raised it
- Description of the change
- Price, and how it was worked out
- Status: requested, priced, sent to client, approved, done, invoiced, paid
- Date approved and how (signed form, email)
- Invoice number once billed
The status column does most of the work. Anything sitting at "approved" or "done" without an invoice number is money you haven't asked for yet.
Make it part of the weekly routine
A register only works if it's used. A few habits make the difference:
- One way in. Every variation, however small, goes into the register. If it isn't in the register, it doesn't exist.
- Make it easy on site. A simple form on a phone beats a paper notebook that gets back to the office a week later.
- Get approval in writing before the work starts wherever the contract requires it.
- Weekly check. Each week, someone in the office goes through every variation marked "done" and confirms it's on an invoice or the next progress claim.
- Owner review. Once a month, look at the total value of approved but unbilled variations across all jobs. If it's growing, find out why.
Connecting the register to your systems
A spreadsheet register is a good start. As the number of jobs grows, the next step is to connect it to the rest of your systems, so approved variations flow straight onto the next claim and into Xero or MYOB without being retyped. That also means variations show up in job costing and cash flow reports, rather than living off to the side. We cover this on construction process automation and construction financial visibility.
Frequently asked questions
What is a variation in construction?
A variation is a change to the original scope of work in the contract, such as extra work, less work or a different specification. It usually changes the contract price.
How do I stop variations going unbilled?
Record every variation in one register, track its status through to invoice, and check every week that completed variations have been billed.
Can I claim a variation that wasn't approved in writing?
It depends on your contract and the circumstances. It's much harder without written approval, so get proper legal advice on specific disputes and get approvals in writing from now on.
Should variations go on the next progress claim?
In many contracts, approved variations are claimed alongside the regular progress claim. Check your contract and make sure your register feeds into your claim process.
If variations are slipping through in your business, book a free initial chat and we'll talk through how to close the gap.