How to Create a PCO in Procore

Understanding PCOs in Construction Management

Change orders represent a critical component in construction management workflows. During any project, modifications to the scope of work, unforeseen conditions, or design revisions might trigger changes to the original contract amount. Procore's system streamlines this process through its Potential Change Order (PCO) functionality, providing a structured approach to capture, review, and manage these changes effectively.

A Potential Change Order serves as an early-stage document used when modifications to a prime contract scope or value occur. This digital record allows project teams to document additional scope, pricing adjustments, schedule impacts, and relevant notes before finalizing the change. Once approved, a PCO can transform into a more formal document like a Prime Contract Change Order (PCCO) or a Change Order Request (COR), depending on your organization's configuration settings.

PCOs play several vital roles in the construction management process. They document changes immediately upon identification, track essential information for the approval process, create a communication log for internal teams and external stakeholders, and enumerate Schedule of Values (SOV) adjustments resulting from the change. The comprehensive nature of PCOs—containing contract company details, contract specifics, titles, status updates, and descriptions—establishes the foundation for accurate budgeting and financial forecasting throughout the project lifecycle.

Essential Prerequisites for PCO Creation

Before diving into the PCO creation process, ensuring you meet certain requirements will save you time and prevent potential roadblocks. Understanding these prerequisites helps establish a smooth workflow from the beginning.

User permissions represent the first critical requirement for PCO creation. You must possess 'Admin' level permissions within the project's Change Orders tool to initiate new PCOs. Some organizations may configure their systems to allow 'Standard' level access for this function, but consulting with your Procore Administrator about specific permission settings remains the safest approach. Permission settings determine not only who can create PCOs but also who can review and approve them.

Tool configuration settings also significantly impact the PCO creation process. Your Prime Contracts tool should be configured with either two-tier or three-tier change order settings. Projects using a one-tier process follow a different workflow, typically creating Prime Contract Change Orders directly. Additionally, projects with the Change Events tool enabled might require creating a change event first, then generating a PCO from that initial record.

Contract approval status directly affects PCO creation capabilities. Your prime contract must maintain an 'Approved' status before you can create associated PCOs. This requirement ensures all financial tracking aligns properly with the approved project scope and prevents discrepancies between contract values and change orders. Working with unapproved contracts can create reconciliation challenges later in the project lifecycle.

Step-by-Step PCO Creation Process

Creating a PCO in Procore involves navigating through several screens and inputting specific information. Following these detailed steps ensures you capture all necessary data for proper change order documentation.

Begin by accessing your Procore project dashboard and locating the Prime Contracts tool in the project's tool menu. Once inside the Prime Contracts section, identify the specific contract requiring a change order and click on its Number link to access the detailed contract view. This initial navigation establishes the connection between your new PCO and the appropriate contract, ensuring financial tracking remains accurate.

After reaching the contract details page, locate and select the "Change Orders" tab to view existing change orders and access creation options. Click the "Create Potential CO" button to initiate the PCO creation process. The system automatically assigns a sequential number to your new PCO, though you can modify this identifier based on your organization's numbering conventions if needed.

The PCO creation interface presents numerous fields requiring completion. Start by verifying the auto-populated fields like Number, Date Created, Revision (starting at 0), and Created By information. Then input a descriptive title and detailed explanation in the Description field to clarify why this PCO exists. Select the appropriate PCO Status from options like Draft, Pending, or Approved, and choose the most relevant Change Reason from categories such as Client Request, Design Development, or Existing Condition.

Completing Essential PCO Information

The PCO form contains several critical fields that require careful attention to ensure proper documentation and tracking. Completing these fields accurately helps maintain consistency across your project's financial records.

The Private option checkbox determines visibility restrictions for your PCO. When selected, this setting limits PCO visibility to Admin-level users only, making it ideal for internal changes not requiring owner review. The Accounting Method field automatically inherits settings from the prime contract, ensuring financial data consistency between the original contract and subsequent changes.

Schedule Impact and Location fields provide context about how the change affects project timelines and specific areas. When a PCO might extend the project schedule, enter the estimated additional days required in the Schedule Impact field. The Location dropdown allows selection of multi-tiered locations relevant to the change, helping teams understand exactly where work modifications will occur.

Reference and Attachments sections allow you to connect supporting documentation to your PCO. Upload relevant drawings, specifications, RFQs, or supporting invoices that justify the change. These attachments create a comprehensive record that simplifies review and approval processes while providing necessary context for all stakeholders.

After completing all required fields, click "Create" to finalize the basic PCO. For changes involving costs, you'll need to attach a Schedule of Values by selecting the "Schedule of Values" tab within the PCO record. Add line items by clicking "Add Line" and specifying the Cost Code, description, and cost type for each entry. If your project uses sub-jobs, select the appropriate sub-job associated with each cost code to maintain accurate financial tracking.

Managing SOV and Financial Impacts

The Schedule of Values (SOV) represents a critical component of any PCO as it documents the financial impact of proposed changes. Properly managing this information ensures accurate budget tracking and financial reporting.

Adding SOV line items requires selecting the appropriate cost code from your project's predefined list. Each line item must include a descriptive title explaining the specific work or materials involved and the associated costs. The system allows you to categorize costs as either additive or deductive, depending on whether they increase or decrease the contract value. For complex projects using Work Breakdown Structures, you'll also need to select the correct sub-job to maintain proper cost allocation.

After adding all relevant line items, review the total financial impact displayed at the bottom of the SOV section. This summary shows the cumulative effect of all line items on the contract value. Verify that this total accurately reflects the expected change amount before saving your updates. Remember that once saved, these financial impacts may automatically update your project budget depending on your system configuration.

Financial accuracy within PCOs directly affects project forecasting and budget management. Take time to double-check all entered values against supporting documentation like vendor quotes or internal estimates. When multiple cost codes are affected by a single change, ensure each receives proper allocation to maintain accurate cost tracking across the project. This detailed approach to financial documentation helps prevent budget surprises and supports transparent communication with project stakeholders.

Best Practices for Effective PCO Management

Creating PCOs efficiently requires more than just following procedural steps. Implementing best practices ensures your change management process remains organized and effective throughout the project lifecycle.

Always provide clear, detailed descriptions when creating PCOs. Comprehensive descriptions help all stakeholders understand why the change is necessary, reduce miscommunications during review stages, and create a reliable audit trail for future reference. Include specific references to related documents like RFIs or submittals that prompted the change, and clearly explain how the proposed modification affects the original scope.

Establish consistent numbering conventions for your PCOs to simplify tracking and reporting. Many teams differentiate between internal and external PCOs using prefix systems like "I-001" for internal items. This approach allows easy filtering when reviewing change orders and maintains clarity when communicating with owners. However, using multiple numbering schemes requires careful management to ensure proper sequencing and prevent duplicate numbers.

Document schedule impacts thoroughly whenever changes affect project timelines. Beyond simply noting the number of additional days required, include brief explanations of why the schedule extension is necessary and how it might affect subsequent activities. This detailed documentation helps project managers adjust master schedules appropriately and provides justification for timeline modifications when communicating with owners and other stakeholders.

Streamlining the Review and Approval Process

The review and approval stages represent critical phases in the PCO lifecycle. Implementing efficient processes for these stages helps prevent delays and ensures all stakeholders remain informed about potential changes.

Procore automatically tracks revision numbers each time a PCO is modified, creating a clear audit trail of changes. Use this feature to your advantage by documenting significant revisions in the description field, helping reviewers understand how the PCO has evolved. This revision tracking becomes particularly valuable when negotiating complex changes that require multiple adjustments before reaching final approval.

Centralize feedback collection by encouraging reviewers to add comments directly within Procore rather than through separate email chains or documents. This approach creates a single source of truth for all PCO-related communications and prevents important feedback from being overlooked. The system's notification features can alert relevant team members when new comments are added, ensuring timely responses to questions or concerns.

Update attachments and supporting documentation whenever new information becomes available. Rather than creating new PCO records for revised information, attach updated files to the existing record to maintain a complete history. This practice prevents confusion about which version represents the current proposal and ensures reviewers always access the most current information when making approval decisions.

Monitor status changes carefully as your PCO moves through the approval workflow. Status transitions from "Draft" to "Pending" to "Approved" often trigger automated notifications and may update connected systems like the Budget tool. Understanding these automated processes helps you anticipate next steps and ensure all team members receive appropriate updates about the PCO's progress.

Advanced PCO Features and Integrations

Beyond basic creation and management, Procore offers advanced features that enhance the PCO process for complex projects. Understanding these capabilities helps maximize the platform's value for your organization.

DocuSign® integration streamlines the approval process by enabling electronic signatures directly from Procore. When enabled, this feature allows you to send PCOs for digital signature without exporting documents or managing separate signature workflows. The system automatically updates the PCO status to "Out for Signature" when the DocuSign process begins and changes to "Approved" and "Executed" once signatures are complete. This seamless integration reduces approval time and creates a more efficient documentation process.

The following advanced features enhance PCO management for complex projects:

• Multi-tier change order workflows: Configure two-tier or three-tier processes based on your organization's approval requirements
• Custom status configurations: Adapt status options to match your specific workflow terminology and stages
• Automated notifications: Set up alerts for status changes, approaching deadlines, or budget impacts
• Custom form fields: Add organization-specific fields to capture additional information relevant to your projects

Enterprise Resource Planning (ERP) integrations connect your PCOs directly to accounting systems, ensuring financial data remains synchronized across platforms. When properly configured, these integrations automatically update your accounting records when PCOs are approved, eliminating duplicate data entry and reducing reconciliation efforts. Verify your specific ERP integration settings to understand how change orders flow between systems and what manual steps might be required to maintain data consistency.

Converting PCOs to Formal Change Orders

The final stage in the PCO lifecycle involves converting approved PCOs into formal change order documents. This conversion process varies based on your organization's configuration and workflow requirements.

In a two-tier change order system, approved PCOs typically convert to Prime Contract Change Orders (PCCOs) for owner billing and contract modification. This conversion process transfers all information from the PCO to the PCCO, including descriptions, financial impacts, and supporting documentation. Some organizations choose to combine multiple approved PCOs into a single PCCO to streamline the owner approval process and reduce administrative overhead.

Organizations using a three-tier system might convert PCOs to Change Order Requests (CORs) before creating final PCCOs. This intermediate step often involves additional review processes or formatting changes to meet specific contractual requirements. The three-tier approach provides additional control points in the change management process but requires careful tracking to ensure all approved changes progress through the complete workflow.

Some projects use a one-tier system where PCOs directly become contract change orders without intermediate steps. This streamlined approach works well for smaller projects or organizations with simplified approval processes. Regardless of your specific configuration, understanding the conversion workflow ensures changes move efficiently from initial identification to final contract modification.

Troubleshooting Common PCO Challenges

Even experienced Procore users occasionally encounter challenges when creating and managing PCOs. Understanding common issues and their solutions helps maintain an efficient change management process.

Sequential numbering problems sometimes occur when creating both internal and external PCOs. The system's automatic numbering might appear inconsistent if you're using different prefixes or numbering schemes. Establish clear naming conventions and train your team to review and adjust numbers manually when necessary. Some organizations maintain separate numbering sequences for internal and external PCOs to avoid confusion, though this approach requires careful management to prevent duplicate numbers.

The following solutions address other common PCO challenges:

• Budget integration issues: Verify that cost codes in PCOs match those in your project budget to ensure proper financial tracking
• Permission restrictions: Review user permission settings if team members report inability to create or view PCOs
• Missing attachments: Implement file naming conventions that clearly identify document types and revision numbers
• Schedule impact tracking: Create standardized methods for calculating and documenting timeline adjustments

ERP integration challenges sometimes arise when change order data doesn't flow correctly between systems. Work with your Procore Administrator and ERP support team to verify mapping settings and understand any limitations in the integration. Some organizations implement manual reconciliation processes for complex changes that don't translate automatically between systems, ensuring financial data remains accurate across platforms.

Maximize Your PCO Management Effectiveness

Creating and managing PCOs effectively can significantly impact your project's financial health and timeline management. Implementing the strategies outlined in this article helps streamline your change management process and improve overall project outcomes.

Regular training ensures all team members understand the PCO creation process and follow consistent practices. Consider scheduling refresher sessions when system updates occur or when new team members join the project. These training opportunities help maintain process consistency and provide forums for discussing challenges or suggesting improvements to your change management workflow.

Documentation standards establish clear expectations for PCO creation and management. Develop templates for common change scenarios and create checklists for required information and attachments. These standardized approaches reduce variation in how changes are documented and help ensure all necessary information is captured consistently. Well-documented PCOs reduce review time and minimize requests for additional information during the approval process.

Periodic audits of your PCO log help identify potential issues before they impact project finances or schedules. Review open PCOs regularly to ensure they continue progressing through the approval workflow and haven't stalled at intermediate stages. These reviews also help identify patterns in change order causes, potentially highlighting underlying issues that could be addressed proactively in future projects or remaining phases of current work.

Start Optimizing Your Change Order Process Today

Mastering PCO creation in Procore represents a valuable skill for any construction professional involved in project management or financial oversight. The structured approach outlined in this article provides a foundation for efficient change management that adapts to projects of any size or complexity.

Implementing these best practices doesn't require massive process changes—start with small improvements to your current workflow. Begin by standardizing descriptions and documentation requirements, then gradually incorporate more advanced features as your team becomes comfortable with the basic process. This incremental approach minimizes disruption while steadily improving your change management effectiveness.

Remember that effective change order management directly impacts project profitability and client relationships. Well-documented PCOs protect your organization during contractual discussions, provide transparency for all stakeholders, and create accurate financial forecasts throughout the project lifecycle. By investing time in proper PCO creation and management, you're building a foundation for successful project outcomes and smoother financial operations.

Take some time this week to review your current PCO process and identify one area for improvement. Whether it's enhancing description quality, standardizing documentation requirements, or implementing more consistent numbering conventions, even small changes can yield significant benefits for your project management effectiveness. Your future self—and your project stakeholders—will thank you for the improved clarity and efficiency in managing project changes.