If you’ve run an accounting firm for longer than 30 days, chances are you’re already familiar with scope creep. It’s one of the biggest time wasters, deadline destroyers, and budget busters known to humanity. It will slowly eat away at your joy with a million and one “small” requests or adjustments.
“Can you just…?”
“Would you mind if we…?”
“Can we do this…”
Before you know it, the scope of your accounting project doesn’t resemble anything that you originally agreed on. Scope creep is a big problem. It’s a direct threat to your future success and it must be neutralized.
In this post, we’ll look at what scope creep is and how to prevent it from happening in your accounting firm.
What is Scope Creep?
Scope creep occurs when the work for a project extends (creeps) beyond the original parameters (scope) of the project. It happens when new requirements are added after you’ve already set a timeline and a budget for the project.
Scope creep is inevitable when there is poor communication on either the client’s side or the accounting firm’s side. If the client doesn’t understand what to expect from the accounting firm or they are unable to express their desired outcome at the start of the project, the client may readjust the original scope of the project.
Similarly, if the accounting firm’s terms of agreement are vague or unintentionally misleading, the client may push back with the demand for more.
If it happens regularly, scope creep is usually the result of poor planning and a failure to communicate.
What Causes Scope Creep?
One of the biggest problems with scope creep is that you rarely see it coming because it happens slowly. That’s why it’s called “creep.” Here are the most common causes that lead to scope creep:
It’s hard to get specific on projects that run for an extended amount of time. People change plans. Businesses reorganize. Things happen outside of your control. Scope creep can often come up as a result of responding to new changes in the moment.
Not Being Clear
Being vague in business is not a best practice, and that’s especially true for accounting firms. Clarity is paramount in any type of business agreement. Both parties should understand the terms of the agreement, and should also understand that there are consequences for changes to the contract. Everything should be spelled out clearly without room for misinterpretation.
Lacking Confidence in Your Services
Lack of clarity is often rooted in a lack of confidence. You may feel like your service does not justify the prices that you charge, and are willing to bend to the client’s changes. This is often a subconscious battle with imposter syndrome, and it can occur with individual accountants or with an entire firm that’s trying to make a name for itself. If you’ve noticed scope creep happening in your firm, whether on a small or wide scale level, it’s a good idea to consider this as a possible cause.
Over-Delivering on Your Promises
Your natural impulse is to offer top-tier customer service that keeps clients happy and loyal. However, if you’re not careful, your core value of “going above and beyond” can lead to over-delivering and giving the client more than what you promised. It’s okay to deliver exactly what you have contracted with the client to provide. That’s what the client expects, and that’s what you should give them.
Not Checking In Regularly
Some firms avoid regular check-ins with clients because they think doing so protects them from scope creep. However, when you communicate regularly with clients, you also have more opportunities to reaffirm your original terms of agreement and guard against scope creep. When clients see you actively working towards a desired goal, they won’t have the chance to feel insecure or doubt your ability to deliver. Scope creep often happens when clients feel the need to micromanage an accounting team to produce the right outcome.
Why is Scope Creep Bad?
Sometimes, scope creep can be a small task that may only slightly deviate from the original path. It may require a minor course correction to get you back on the path to the original destination. Other times, scope creep can completely alter the direction of a project and cause you and your client to end up in a different destination. These changes can take a lot of time and can eat away at your profits.
Scope creep leads to a lot of negative outcomes that are bad news for your accounting firm, even if it only happens with a handful of clients.
Scope creep is a guaranteed way to erode the relationship between you and your client. And because it’s a trust killer, scope creep must be handled aggressively.
How Do You Stop Scope Creep From Happening in Your Accounting Firm?
We all know that scope creep is bad, but the ways to avoid it aren’t as obvious. Here’s how to prevent scope creep in your accounting firm:
Set Expectations at the Start
Always be open to answering as many questions as your client has before beginning a project. This will ensure that you’re delivering them the best combination of services and they don’t feel confused or frustrated as the project progresses. Exhausting all of the possible scenarios or outcomes may take more time in the beginning, but it will definitely save a ton of time and other resources once you’ve gotten started.
Write a Solid Engagement Letter
When you start a relationship with a new accounting client, it’s a best practice to write an engagement letter. Although not a contract, when signed, this legally binding document will outline the scope of the accounting project. It will establish what you’ve committed to do for the client.
To be effective, your engagement letter should contain specific information, such as agreed upon deadlines. It should outline billing terms which will clarify the client’s responsibilities to you. It should also tackle the issue of client withdrawal and what will happen if the client decides to end an agreement.The engagement letter should make your working relationship crystal clear and eliminate the possibility of scope creep. Click To Tweet
Ultimately, the engagement letter should make your working relationship crystal clear and eliminate the possibility of scope creep. If the terms of your agreement change, then a new engagement letter should be drafted up and signed. Do not skip this step, because an engagement letter protects your accounting firm from all of the negative consequences of scope creep.
Have a Price List Ready
Know what you offer. Be prepared with a list of what each additional service costs in relation to the service you’re already providing.
Create a Script
Sometimes, it’s difficult to push back on scope creep. However, if you have a pre-written response (i.e. a script), it’s a lot easier to react appropriately and in line with your company’s values. Using a script can give the members of your team the confidence to respond quickly and correctly when a client asks, “Can you also…?”
If you want to run a successful accounting practice, you must start by managing scope creep. When you’re working with a client in an ongoing project, it’s in your best interest to make sure that you’re both on the same page. Checking in during major steps along the way can ensure that the client maintains confidence in your ability to deliver.
Did you know that you can streamline the way you create and deliver engagement letters? Mango can enable you to create engagement letters that you can access and sign digitally. Learn more about this and other features provided with Mango Accounting Practice Management here.
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