Scope creep is one of the biggest costs to our profit as accountancy practice owners.
And it is responsible for thousands of pounds worth of fee write offs every year.
There are numerous reasons and causes of scope creep, some of them are as simple as tasks taking longer to complete than expected, changes in client circumstances, or failing to price your services properly.
Another big reason?
We agree to take on little bits of extra work and are too worried about how they’ll react to charge them.
It could be something as simple as:
- Processing payroll for a clients’ additional employee
- Doing an ad-hoc cash flow forecast
- Providing a mortgage reference letter
Now these tasks may seem small and relatively insignificant compared to some of the bigger projects you complete for clients.
But these additional services add up, they’ll cost you time and you’ll be leaving money on the table.
So if you’re worried that scope creep could be eating into your practice profits, then read on.
I’ll show how to both identify and manage scope creep for your accountancy practice….
How do I identify scope creep?
If you’re regularly behind on projects and find you’re struggling to get work out the door on time then something is going wrong somewhere.
And one of the biggest indicators that you’re suffering from scope creep in your practice is missed deadlines.
So what are some of the causes?
- Clients giving inaccurate information or failing to deliver documents on time
- Legislative changes
- Clients growing or changing
- Clients asking for additional work, extra’s or freebies
- Inneficient processes and systems for getting work out of the door
Now this is a non-exhaustive list and there are numerous causes of scope creep to look out for and identify.
But if any of these sound familiar then you need to solve the problem before it spirals out of control.
How do I tackle scope creep?
1. Ask the right questions
Simply asking the right questions during your initial consultation can dramatically reduce the possibility of scope creep further down the line in your working relationship with them.
By taking the time to get as much detail as possible about the client and what they want, you can make sure that there will be no nasty surprises further down the line.
This is your opportunity to tailor your service to them and ensure what you offer will fully meet their expectations.
And importantly, if you have all the right facts you can provide a feasible and accurate turnaround time so deadlines are met.
2. Be clear and up front
I’m sure you’ve heard the phrase ‘prevention is better than a cure’ before, and the statement applies perfectly when tackling scope creep.
One of the best ways to handle scope creep is by clearly defining your services from the get-go.
This means at the very start of your relationship with every client it needs to be crystal clear which services you are providing for them, and just as importantly which services you won’t be providing.
This need to be transparent in any proposal, fixed price agreement or letter of engagement you ask them to sign.
By doing so, the client has a visible guide to the services they are entitled to, and you have a reference should they ask for anything additional outside of the scope.
3. Manage expectations
Managing expectations is absolutely key when trying to prevent scope creep.
And a great way of doing this is by making it clear what would happen should things change or additional services be needed.
When forming the pricing agreement, proposal or letter of engagement you will reiterate that the price they are paying is based upon the number of transactions and level of work they ask for.
And if the circumstances change, (for example they may increase staff members and need more payroll services) they should be made aware that any additional work will incur a cost or become a separate project.
This way, if they know in advance that they could be expected to pay for any add-ons they will either think twice about asking or you won’t be giving work away for free!
A great way of managing these expectations is by having a pricing menu/brochure of services. This can be done using software such as GoProposal or it could be embedded on your website using Practice Ignition.
A price list sends a clear message to clients that any additional tasks and work they want to throw your way may be out of scope, and they need to pay for them.
4. Educate your team
In order to effectively manage and tackle scope creep your whole team needs to be able to identify and deal with it should it arise.
Often lower level or junior team members only handle the compliance tasks and will be solely responsible for the completion of the work on the front line.
This means they may have little idea of the overall scope of the project and may simply agree to take on additional work thinking: “it’s only a small job I’ll take care of it”.
If you aren’t aware that team members are doing this, then you will become aware when a problem has arisen such as a missed deadline or a massively overworked team member.
So, educate your team members.
Ensure at the start of any project your team fully understand exactly what is included in the scope of a project, what isn’t and make sure they can identify any deviation.
If team members are properly educated and know what to do about changes then you can nip scope creep in the bud before it becomes an issue.
Another thing you can do is set additional work order KPI’s.
If you give your team members targets for the number of additional work orders they put through, they won’t simply do things for free and off the record.
Be firm and review
Things aren’t set in stone.
They change, and scope creep occurs because of this very fact.
So, it’s important that we regularly review, stay firm and keep track of our projects.
If a client approaches you with changes to their situation or fails to deliver on their side of the bargain, don’t be afraid to readdress your agreement and revise it.
If a client starts asking for additional services or “a small favour” you can simply say no.
Scope creep can eat our time and profits if we aren’t strong and transparent on the agreements we make with clients.
But if we are, then we can dramatically increase our practice profitability, find deadlines far easier to meet and see dramatic improvements to your practice’s bottom line.