For Controllers supporting 400 MW-plus data center construction programs, change orders are not simply project-management items. When design revisions, power delays, or supply-chain setbacks move a milestone, costs, commitments, and remaining-cost assumptions can fall out of alignment before your close. Those changes can result in WIP inaccuracies that may not be identified until a formal WIP review or audit. By then, the margin behind the variance may be difficult to recover.
Your close, forecast, and WIP schedule need to reflect the project being built now — not the original design, an outdated budget version, or pending changes maintained outside the financial system.
When Construction Change Orders Outrun Your Close
Power delays and supply-chain setbacks add another layer of work. When an interconnection date moves or a major equipment delivery slips, your project team may need to resequence work, revise procurement assumptions, change billing expectations, or move activity between phases. Those milestone shifts often create new cost entries, revised commitments, and changes to the remaining-cost forecast during the period. If your team does not reflect those changes in your reporting promptly, they accumulate as reclassification and reconciliation work at month-end.
Your close becomes a recurring review of whether costs belong to the original phase, revised scope, an approved change order, a pending change, or a future phase. A revision to cooling equipment or electrical distribution can also create change-order exposure carried by mechanical, electrical, and plumbing (MEP) trades, requiring you to reconcile revised subcontract value, committed cost, and the remaining-cost forecast. On data center programs, a shift to higher-density racks or liquid cooling can alter electrical capacity and mechanical layouts after estimating and procurement decisions have been made.
Data center teams are using faster delivery approaches that can leave less time to revise estimates, code costs, update forecasts, and correct WIP before the next close. The risk increases when the original estimate is treated as though it remains a reliable financial control after the design changes. As data center construction budgets move away from the assumptions that supported the guaranteed maximum price (GMP), you need a versioned, auditable baseline that reflects the work now being performed.
Cost Volatility Adds Reconciliation Work
Cost escalation can cause original budget assumptions to drift from actuals before routine reconciliation identifies the difference. The Mortenson Construction Cost Index reported a 5.6% national increase in nonresidential construction costs over the preceding 12 months, enough to make an earlier budget version less useful before revised scope is fully priced and approved.
Data center MEP project scope can be especially volatile as power density, cooling needs, and equipment availability evolve. When a design revision arrives, the original estimate may no longer represent the cost of the revised work. On a multi-year campus, a revised subcontractor package or equipment substitution can create a new cost profile before the prior estimate is fully updated. Separate spreadsheets and manual journal-entry rewrites add work to an already compressed close. The resulting exposure often begins as a reporting and reconciliation issue rather than an identified cost overrun:
- Actual costs remain coded to an original phase while the work supports revised scope.
- Project managers update a forecast, but the budget version and related general ledger, job cost, and planning views do not change with it.
- Pending changes are tracked outside the financial system, leaving your team to locate, reclassify, and explain activity at month-end.
These gaps can make current margin appear more stable than it is. They also delay the conversations you need to have about owner approval, subcontractor exposure, and remaining-cost assumptions while there is still time to act.
A Slow Close Creates WIP Risk
Construction WIP depends on current costs, an up-to-date estimate at completion, contract value, and a supportable view of approved and pending changes. When those inputs lag behind the project, WIP can become inaccurate even when you have carefully reconciled the available data. Delayed craft labor postings can leave project job cost incomplete even when payroll has been processed, creating another timing gap between the work performed and the costs reflected in WIP.
A one-percentage-point WIP error on a $4 billion construction program can create a $40 million reporting variance. This is a scale illustration, not a prediction that every delayed change order becomes a loss, but it does show why timely processing matters. Even a small percentage variance across a large, phased program can affect reported revenue, margin, overbilling or underbilling, working-capital decisions, and the information your business provides to lenders and surety partners.
On a 400 MW-plus campus, the issue is rarely one missed change. It is the cumulative effect of design revisions that remain in emails, spreadsheets, project-management workflows, or informal forecast discussions while you close the month. A change that is eventually processed may still distort one or more close cycles before it is reflected in WIP reporting. When Phase 1 establishes the baseline for later phases, inconsistent classification can carry the same error forward, leaving you to explain both a margin change and a difficult-to-trace project history during an audit.
Give Finance a Current Structure for Scope Changes
You still need to evaluate pending changes, cost-to-complete assumptions, approval status, and revenue-recognition treatment. The goal is not to remove judgment from construction accounting. It is to reduce the manual reconstruction that delays your review.
Sage Intacct Planning works with Sage Intacct’s dimensional reporting features so you can organize actuals, budgets, and forecasts by the reporting structure that matters to your business—such as margin by campus, phase, entity, or joint venture, project, department, customer, or other defined dimensions. When scope shifts mid-period, you can update planning assumptions and report actuals, budgets, and forecasts through the dimensions your business uses — rather than reconstructing a revised management view in disconnected spreadsheets. That approach can help you:
- Keep revised scope, costs, and the current budget version visible by phase or campus.
- Reforecast as assumptions change without rebuilding a disconnected workbook.
- Preserve an audit trail and review a change across projects, phases, or legal entities before month-end.
Your specific workflow should reflect your approval policies, project-management system, and revenue-recognition process. Software does not decide whether a change order is collectible or approved. It can give you a more consistent way to show where the exposure sits and how it affects the forecast.
More Frequent Reforecasting Supports a Better Close
Sage Intacct dashboards helped Aegis Project Controls move budget-versus-actual reporting from quarterly to monthly. Work that had taken four to five days each quarter was reduced to about 30 minutes each month. Sage Intacct Planning was later added to its accounting platform. Aegis’s results show how connected planning, reporting, and financial data can reduce the time required to produce current information.
Aegis is a construction consulting firm, not a data center general contractor, and its results are not a promised outcome for every business. However, for your team, less time spent recreating reports means more time to investigate variances and update forecasts. More frequent reforecasting may be more useful than a quarterly exercise when scope, equipment availability, and owner requirements continue to shift.
Close the Books on the Project You Are Building
Design changes, power constraints, equipment availability, and MEP cost pressure will continue to alter assumptions during execution. A reliable close should show the project as it exists today—not as it was originally estimated or reconstructed weeks later, after construction change orders have accumulated. That requires current cost detail, disciplined change-order handling, connected forecasts, and WIP reporting that can absorb revised scope without a new spreadsheet exercise each month.
SWK Technologies will help you evaluate Sage Intacct Construction honestly against your firm’s needs and scope, and provide you with all of the information you require to ensure you get the most out of your technology investments. Contact SWK Technologies to discuss how your current close process handles change orders, revised scope, and WIP on large data center construction programs and to see if cloud ERP is the right next move for your success.