Backcharges are a standard part of commercial construction workflows—when one trade must perform work outside their contract scope due to another trade's actions or inactions. While necessary, the process of tracking, documenting, and resolving backcharges creates friction between general contractors and specialty contractors. While proactive coordination can prevent many backcharges, the reality of commercial construction means trades will sometimes need to perform work outside their original scope due to schedule conflicts, quality issues, or coordination gaps.
Even though a backcharge is a standard process in commercial construction, the only tools available to track, communicate, and share backcharges between stakeholders are most commonly paper, email, and spreadsheets. Backcharges often get entered in a GCs system of record, but the only way to share them between parties is in an exported spreadsheet or PDF log.
This post examines why backcharge management remains fragmented, identifies the root causes of delays and disputes, and shows how modern change order communication can reduce risk for all stakeholders.
A backcharge occurs when one specialty contractor performs work outside their original contract scope due to another trade's actions or inactions on the same project. Subcontractor A performs the work and sends a Change Order Request (COR) to the General Contractor, and the General Contractor then sends the cost as a deductive COR to Subcontractor B who caused the out of contract work. It’s a net zero liability to the GC, and a net zero liability to the project Owner, with the GC essentially becoming the middleman.
Example Scenario:
Like traditional change order workflows, backcharge management relies on manual processes, fragmented email chains, and spreadsheets. Without a centralized system, backcharges pile up unseen, creating risk and contentious negotiations at project closeout. Three key factors create friction in backcharge management:
Clearstory's backcharge workflow addresses these friction points through real-time visibility, quality documentation, and centralized organization. With our end-to-end workflow, Subcontractors can instantly generate a backcharge ticket, complete with photos of their work. The ticket is automatically priced and sent to the GC, and with a simple click of a button, the GC can reroute to the Subcontractor being backcharged, all within the same day of the work being done.
Why is this important?
Clearstory's shared, real-time COR log enables specialty contractors and GCs to manage backcharges through a dedicated workflow that captures documentation, tracks costs, and maintains visibility for all stakeholders. Clearstory's Backcharge feature allows teams to attach backcharges to existing CORs or upload backcharges created outside the platform, maintaining a complete record in the shared COR log. Let’s take a look at how easily the process works:
Create backcharges from received CORs
The backcharge entry is created and added to both the received COR log and the contractor's log. With this functionality, you can create a backcharge entry against an existing COR entry. This can be a COR received via Clearstory from a Specialty Contractor or one you've created on behalf of a sub or trade partner. Plus, you can create multiple backcharges against a single COR entry.
Upload backcharges from outside Clearstory
The backcharge is added to your received COR log and appears in your contractor's log as a backcharge entry. In this user-friendly flow, you can simply drag and drop a COR file from outside Clearstory, seamlessly adding it to both your Received COR Log and the log your contractors maintain as a backcharge.
While proactive coordination remains the goal, Clearstory's Backcharge feature provides GCs and trade partners with the visibility, documentation, and organization needed to process backcharges quickly and reduce disputes. By providing real-time visibility and centralized documentation, Clearstory reduces the delays, disputes, and revenue risk that have traditionally made backcharges a source of friction between general contractors and specialty contractors.
When should a general contractor issue a backcharge?
Issue a backcharge as soon as you confirm that one trade’s mistake or delay has created extra work for another. Fast action keeps costs visible, allows the at-fault subcontractor to respond quickly, and prevents surprises at project close-out.
What documentation is needed to support a backcharge?
Include clear, dated proof:
Strong documentation keeps disagreements to a minimum.
How does Clearstory simplify the backcharge process?
With Clearstory you can:
This same-day visibility lowers risk and speeds resolution.
How can subcontractors avoid unexpected backcharges?
Work to spec, respond quickly to punch-list items, and keep detailed photo logs. Early fixes cost less than formal backcharges and build trust with the GC.
What’s the difference between a backcharge and a change order?
A change order updates the project’s scope and budget for new or deleted work. A backcharge moves the cost of fixing defective or incomplete work to the subcontractor responsible. Both change dollars, but only backcharges assign responsibility for mistakes.
Clearstory helps general contractors, specialty contractors, and owners manage change order costs with the transparency and speed needed to reduce disputes, accelerate approvals, and maintain strong project relationships. To learn more about Clearstory and see how thousands of contractors are improving their backcharge Change Order process, connect with one of our experts at info@clearstory.build or book a demo to see how Clearstory can streamline your next project.