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Scope creep: why it happens and how to avoid it

26th Feb 2024
Brought to you by
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Are you running an accountancy practice? Or is it running you?

AVN helps you to take back control of your practice.

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Have you found this content useful? Use the button above to save it to your profile.

Scope creep is all too familiar to many accountants. You realise too late that the work you’ve been doing isn’t included in the client’s fee. So either you give them the unwelcome news that their fee has gone up or you end up working for nothing. 

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Nobody wants to have that difficult conversation with a client: “Actually, there was more work involved than we expected so your fee’s double what you thought.” Who could blame them for kicking up a fuss or even leaving altogether?

And nobody wants to work for free either. Accountants put in enough hours as it is.

So how can you stop it happening?

Why scope creep happens

If your engagement letters don’t contain enough detail, your clients can’t tell what they’re paying for. Unless you spell it out, they will make assumptions about what services are included in their fees. But what you mean when you say ‘bookkeeping’ and what they think it means, could be very different.

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 rather than an add on.

Lack of clarity can be an issue internally too. If your team have different interpretations of what’s included in a service, you can get into a situation where the scope of work differs depending on who is carrying it out.

How to avoid scope creep

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?

Start by reviewing your client engagement letters. Make sure they specifically list everything that you’ll do within your fee. And make sure to also specify what’s not included. You don’t have to list every single service they don’t get, just make it relevant to each client. So if they’re paying for tax planning, be clear which kind of tax planning is and isn’t included. In fact, this can help you to cross sell additional services. When your clients see what they’re missing, it often prompts a new conversation with you.

Communication is king

Above all, keep communicating with your client. If it becomes apparent that there’s more work involved than you initially thought, tell them as soon as possible. You might decide that you’ll do a certain amount beyond the original scope but that there’ll be an additional fee for anything further. The important thing is to discuss it and reach an agreement you can both live with.

And what about when your client calls with “just a quick question”? It’s so easy just to give them an answer there and then, isn’t it? But when you do this, you’re giving away your expertise – your true value – for free. Instead, tell them that you’ll need to research it to make sure you cover all eventualities. Then end with, “I’ll check that and come back to you with the price – is that OK?” If the client says yes, that’s great, you’ve won an additional fee. If they say no, you don’t have to do the work.

What to do when scope creep becomes the norm

Has scope creep become the norm with a particular client? Left unchallenged it means that they aren’t just unprofitable, you’re actually making a loss. So what’s the solution?

Arrange a conversation with the client. Explain that as their circumstances have evolved, you’ve been doing more and more for them and you now realise that you’re making a loss. You’re sure they’ll agree that out of fairness and for the sake of commercial sense, this can’t continue. You’d like to take a fresh look at their needs and the work you’re doing for them so you can price accordingly. 

In our experience at AVN this is almost always a positive conversation with a positive outcome. And if the client doesn’t want to pay more, do you really want to work with them?

Scope creep doesn’t have to be a fact of life. Setting clear expectations and keeping in regular contact with your clients go a long way towards eliminating it altogether.

Looking for more ideas for a thriving accountancy practice? Check out Shane Lukas’ upcoming webclass – How to progress the accounting business growth journey.