What it means
Long projects evolve: a customer asks for additional work, a site condition changes, or a supplier suggests a substitute, and without one record, project, sales and finance teams can each hold a different version of what was agreed. The variation log makes the history visible from request to decision and later billing.
Give each request a unique reference, recording who raised it, when, what current obligation it would change, why, the affected drawing or specification version and whether the work has started. A request marked "under review" should not quietly change the delivery plan; if urgent work must proceed, record who authorised that risk and what contractual route applies.
Do not assume that an employee's operational permission is also authority to change price. Estimate the full effect, because a small extra task can extend a critical path, need different materials or alter warranties, so show added and removed work, direct costs, pricing method, tax and the effect on deadlines and acceptance criteria.
Identify dependencies with other variations, since numbering each change helps avoid paying for the same work twice. If work was omitted, record whether the price should fall as well as recording additions that increase it.
Check the contract's variation procedure, which may require a specific form, notice period, signatures or written instruction before work starts, and a project manager may have a monetary approval limit. An email might be sufficient under one agreement but not another, so seek contract or legal review when authority or entitlement is disputed rather than relying on a general practice.
Preserve the actual signed document and link it to the log. Keep the commercial and operational statuses distinct: a change may be technically accepted but price still disputed, or a price may be approved but implementation not complete, and the baseline budget and schedule should be updated only under the agreed control process.
Finance needs to know when invoicing is allowed, which milestones changed and whether an expected claim is uncertain, and a log entry alone is not proof that revenue can be recognised. Review open requests regularly with both sides, since old proposals can become de facto work if staff keep building while approval stalls, and escalate before costs grow to agree whether to pause, proceed at risk or return to the original scope.
Summarise accepted variations in a current contract-value and forecast view, while preserving the original contract for comparison. For owners, the log protects margin and relationships, because it helps the business say what changed, why the date or price moved, and which approval supports the decision.
In practice
Real-world examples.
Example
A fit-out customer requests an extra meeting room. The contractor logs the request and gets written approval of cost and date before ordering materials.
Example
A supplier proposes a cheaper component. The buyer records a price reduction and quality review, not just the original price plus later additions.
Example
A team completes extra work after a verbal instruction. The log identifies the unresolved authority and evidence rather than showing the claim as approved revenue.
Formula
Calculation
Revised contract value = Original contract value + Approved additions - Approved omissions
Worked example. An invented contract starts at $500,000. Signed variations add $40,000 and omit work valued at $15,000.
- Revised contract value = $500,000 + $40,000 - $15,000 = $525,000.
- A further $20,000 request under review stays outside the approved value, even if it appears in the log.
A separate forecast may show possible changes, clearly labelled by status and probability. If the $20,000 request were approved, the forecast contract value would become $525,000 + $20,000 = $545,000, but until then it is reported as pending and not as agreed revenue.Case study
Seen in the real world.
This illustrative and entirely fictional example follows Harbour Build, an invented contractor refurbishing a clinic. Its site lead received repeated requests for different finishes and additional cabinets. Some were approved by the customer director, others by on-site staff who lacked commercial authority. Finance billed all of them together, and the customer challenged the invoice. Harbour gathered the requests, site records and signed instructions.
It separated approved changes from disputed work and worked with the customer to settle the latter. On later jobs, the site team entered every request into a log before starting. The commercial manager reviewed cost and schedule effects, obtained the required signatures, and sent a weekly list of open decisions to both parties. It gave the team one place to see what could be built and billed.
Watch out
Common mistakes.
- Treating an unapproved request in the log as a signed contract amendment.
- Recording added cost but ignoring omitted work, schedule effect and changed acceptance criteria.
- Updating the project budget before the commercial decision is documented.
Questions
People also ask.
Is a variation log legally binding?
It is a tracking record; the contract determines the approval and documentation required for a change to take effect.
Should rejected requests remain in the log?
Yes. Retain the decision and reason so later teams can understand the project history.
What if urgent work begins before approval?
Record the authority, risk, notice and contractual route promptly; do not label an uncertain claim as approved.
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