Mark Wickersham Training International Ltd
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Scope creep 2: When to deal with scope creep

In the second part of his series, Mark Wickersham explains at which point in the client relationship you should be addressing potential scope creep issues.

8th Apr 2021
Mark Wickersham Training International Ltd
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Scope creep
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You can check out the first part of this series, ‘What is scope creep?’, here.

At what point should you deal with scope creep?

Strictly speaking, scope creep is not a pricing topic. It’s more to do with project management.

Yet, the key time to deal with scope creep is at the pricing stage.

You need to deal with scope creep right away at the start of the project and factor it into your price. That way you are guaranteed to get a profit even if you give a fixed price upfront.

Many accountants and bookkeepers struggle to make the move away from hourly rates towards value pricing because of scope creep. 

The first step towards value pricing is being able to give a fixed price to the customer up front. But, if you don’t know the scope of the work and you give a fixed price, then end up overrunning on the project, the result is that you make a loss on the job.

I’ve seen this happen so many times and it causes accounting professionals to struggle with value pricing and sometimes return to hourly rates, even though it’s not the most beneficial way to price. 

Scope creep is always an issue, regardless of which pricing method you use. 

When I used to work as an employee in a large multi-partner firm in Sheffield, scope creep was a constant issue. 

When we had the books and records and were dealing with the end of year work, one of the most common occurrences was a client calling us up and asking for a mortgage reference letter. They would send the form over and ask us to fill it out.

It was a simple form, so we’d fill it in and send it back to them. We’d put the time on the timesheet, but then when we got to the end of the project, we would realise we never agreed a fee for that work.

We would inevitably just write it off and do the work for free.

Based on the surveys we have carried out we know that about a third of the profession don’t charge for setting their clients up on a cloud accounting system. This is another common job done for free. 

This kind of thing happens all the time. It just seems easier to do those small jobs for free – but we absolutely shouldn’t. 

When you use value pricing, your price should reflect the value the client is receiving. You should be charging for all those small tasks you write off because that work is valuable.

If you address scope creep at the outset of the relationship before scope creep happens, it will make it much easier for you to have conversations with your client down the line about adjusting their price due to scope changes.

An accounting professional I once worked with commented on scope creep:

“There were some clients who were shocked that I considered new work to be out-of-scope. I had to explain that when I quoted the price for their work, I couldn't have known that these changes were going to happen, and therefore they were out of scope. Moving forward I'll be adding that to the upfront contract and conversations.”

In the next part of the series, you will discover the four different types of scope creep. When you know what you are looking for, it becomes easier to identify scope creep and put a stop to it before it becomes an issue.

If you have found this useful and want to learn more about value pricing, marketing and business strategy, I run a free live training session online every month with a different topic chosen by you. I also take Q&A at the end to answer your burning questions live. Click here to register and I will send you an invitation to the next session.

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