Scope creep and how to avoid it

Scope creep and how to avoid it

Scope creep is a major cause of stress for accountants.

It’s demoralising and unprofitable – after all, it means you’re working for nothing! And it wreaks havoc with client relationships. So what’s the solution?

 

What is scope creep?

Scope creep happens when your clients think their fee includes work that you haven’t priced for in that fee.

For example, they might assume that inheritance tax planning is included in another tax planning service. Or that auto enrolment is part of the payroll service.

That can lead to some very difficult conversations when it comes to paying the bill. There are only two outcomes from these conversations, neither of them good. Either you don’t charge for the additional service so you end up working for free. Or the client isn’t happy about paying an additional amount, which puts them at risk of leaving.

 

Why does it happen?

If you don’t spell it out, clients will make assumptions about what services are included in their fees. This could be based on what their previous accountant did, or even what their mate told them down the pub. But it’s not enough to be clear about which services are included. You also have to be crystal clear about what isn’t included.

Common mistakes are not to have enough detail in your engagement letters, so your clients can’t tell what they’re paying for. Or, when you start offering a new service, you don’t specify to clients whether or not it’s included in their fee – and some of them assume that it is.

 

How to avoid scope creep

It starts, as always, with talking to your clients. Find out what they need and what you can offer that will have most benefit for them.

Review your client engagement letters and make sure they specifically list everything that you’ll do within the fee.

Also specify what’s not included in the fee. You don’t have to list every single service you offer – make it relevant to the client. So if they’re paying for tax planning, be clear which kind of tax planning isn’t included. As well as avoiding scope creep, this can help you to cross sell additional services. When your clients see what they aren’t getting, it often generates interest and prompts a new conversation with you.

Clarify with your team exactly what work to included in each of your services. Above all, avoid getting into a situation where the scope of work differs depending on who is carrying it out.

When you tell your clients about a new service, state clearly how they can get it. For example, “our Silver and Gold Level packages include our new cashflow forecasting service . It is also available as a stand-alone service for an investment of £XXX.” AVN members use the Client Engagement Clarification letter which asks if they want your help in  this particular area. This essentially requires them to answer Yes or No as to whether they want this included within the scope of their engagement. If their answer is Yes then you have in effect made a sale. If their answer is No you have clarified matters, and removed any scope for them subsequently misunderstanding, complaining, or even suing you because they felt you were negligent in not doing it for them.

Look at when scope creep has happened in the past – is one particular service more susceptible than others? Or is it across the board? Where do you need to focus to eliminate it?

 

Want more solutions?

Looking for more solutions for scope creep and other common challenges?

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It’s a fantastic resource for any accountant who wants to see their business succeed.

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