When you pass a cost on to a Change Order Client, the income requirement normally follows the cost — «back-to-back». When a Change Order Sub is approved, AIMZ suggests the same status and amount on the linked Change Order Client, and the income follows cost + surcharge. In other words, if the subcontractor cost increases, the claim towards the client increases accordingly. With a fixed price you lock the claim instead, so later changes in cost do not affect what you have already sent to the client.
When to use which?
Back-to-back (default): the income follows the cost plus your surcharge. Suitable for cost-plus work, where you invoice the actual time and materials used.
Fixed price: you have agreed a fixed amount with the client. If you lock the claim, it stays the same even if the subcontractor cost is updated later. If the cost then turns out higher than expected, the coverage ratio on the change order will be lower.
This is how it looks:
See also Change Order Client for how income requirement, cost price and surcharge fit together, and What is the difference between cost, cost price, cost claim, income requirement and income?