We all know how easy it is to fall into the trap…
A client rings up, or emails in, and they just want this little extra thing doing and you say to yourself:
“Oh, it’s only a small job, not too much effort, it won’t take me long…”
And before you know it, this is happening with another client and another, and the scope of each job is increasing beyond your control.
Which creates a conflict in your mind…
“When do I let them know that the fee needs to be increased? How are they going to react? Will they think that I’m ripping them off? Are they going to leave me for another accountant? Maybe I should just leave this one out and not charge them?”
Once you’re in this trap, it can become very difficult to climb out, which is why it’s vitally important you have systems in your practice to reduce the risk of scope creep.
What Exactly Is Scope Creep?
Scope creep is when the scope of work that has been agreed with a client increases or changes.
And what this typically means is that your clients are asking for more, they’re receiving more, but 99% of the time they aren’t paying for more.
When not managed properly, this can have a serious impact on your bottom line profits and put a strain on your client relationships.
So, what can you do to reduce the risk of scope creep in your practice and prevent it from eating into your hard-earned profits?
1. Pre-Empting Scope Creep
The easiest way to control something, is to reduce the chances of it happening in the first place.
With scope creep, this can be done in a number of ways, but ultimately it comes down to how you define your services.
Make sure that all your agreements and letters of engagement spell out clearly:
- Exactly what you will be doing (i.e. what’s included in the scope)
- And exactly what you won’t be doing (i.e. what’s not included in the scope)
These agreements want to be reviewed on an annual basis for your smaller, basic clients and on a quarterly basis for your larger more complicated clients.
Also, as part of your engagement process, it’s a good idea to manage your client’s expectations upfront.
Let them know that you want to offer them the best service possible with the highest quality of work and in order to do that, if anything is seen as outside of scope, you will let them know in advance and adjust the fee accordingly so that you can continue delivering the service they deserve.
This also means educating your team so that they’re aware of exactly what the engagement includes, so they can spot when something is outside of the agreed scope.
2. Controlling Scope Creep
It would be impossible to completely prevent scope creep from happening.
This means that it’s important to have control measures in place to limit the effects it has.
One way of controlling scope creep is to make sure that when a client’s requirements begin to exceed what has been agreed, you contact them immediately to let them know that the scope of work has changed and the fee needs to be reviewed.
As long as you have managed their expectations upfront, this isn’t a difficult conversation to have.
Once you have let them know and their engagement letter has been amended accordingly, you can adjust your workflow and continue doing the work profitably.
Another way of controlling scope creep is to have a system for regular client contact, ideally once every couple of months.
Not only does this mitigate the risk of scope creep, it also leads to up-selling additional work that would otherwise not have been done.
Top Tip – Have a whiteboard in your office and set ‘Additional Work Order’ KPI’s for your client-facing staff. If these numbers are low, then it might mean that additional work is being done for free outside of scope. If these numbers are high, then you’ll be adding lots of additional revenue to your practice.
Client Communication Is Key
The key to pre-empting and controlling scope creep in your practice is to make sure that you are communicating with your clients regularly and honestly and managing their expectations throughout.
Don’t be afraid to speak to them. If the fee needs reviewing, tell them. They will understand.
If you don’t, then it’s your profits that will suffer as a result.
With the right systems, processes and mind-set in place, you can avoid the risks of scope creep and enjoy your healthy profits.