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In today’s episode of ‘From the eLearning Trenches,’ we asked one of our learners to identify how variations in scope of work are managed within the firm. Who is responsible? Are these issues dealt with proactively? What needs to change in order to take better control of pricing as matters proceed?

As our fees are not necessarily set, variations aren’t necessarily managed. 

In terms of compliance work, we generally apply a fixed rate increase to all bills, unless additional work is required (i.e., capital gain calculation etc.). Depending on the additional work, dictates how the process is managed. 

Generally, the accountant reports changes and additional time required to the reviewer of the job. From there the reviewer makes a call as to whether the client needs to be informed of additional costs. If the client needs to be informed the reviewer or manager will reach out to the client and explain that additional work is required because of xyz and may discuss with the client how we can keep the fees down and any options available to the client. 

However, the above is in an ideal world and this isn’t always necessarily how the process is dealt with. We can be a lot more proactive with communicating to the client the extra work of the scope variations that are involved, in particular our smaller clients where they notice the increase a lot more than our larger clients. 

In order to overcome this, I believe we should implement a process to take some time initially before starting the job to review the work involved and if there are additional services or scope variations required, call the client and explain to them upfront the work involved and additional fees involved. This should then be followed up with an email so that all clients are on the same page. 

Additionally, in particular our small clients will often contact us to prepare small tasks during the year. We have recently tried to start charging clients more for these services and had push back from some clients. Therefore, I believe all of our accountants need to get better at communicating to the client upfront that there are additional fees for the scope variations and additional services provided. 

Overall, scope variations aren’t dealt with proactively within the firm and this is mainly due to fear to communicate with the client. 

This is something I would like to tackle heavily in the next 6 or so months (on my SMART Action Plan)

Feedback from our experts

Dealing with scope creep is a challenge in any professional service firm. It’s obviously easy to identify special projects or even significant matters out of scope, however when the job budget is experiencing ‘death by 1,000 cuts,’ it can be very difficult to manage client expectations.

With compliance work, issues arise when clients see the work as commoditised. They expect a result and are not interested in the process. If work is not provided in a timely or accurate information, the responsibility is passed to the accountant to deal with it. Essentially, the client runs the show.

A good solution is to clearly explain up front to the client what’s expected in relation to the quality and timeliness of work received. Many firms address this by refusing to accept clients who do not have their bookkeeping under control. Alternatively, they advise the client that day to day financial management issues need to be addressed up front. 

Really, there is no excuse for an accountant to continue to do work that is outside scope without referring back to the client. Internal training on what is outside, and within scope, should be mandatory for all accountants, managers and partners. Clear guidelines for going back to the client when there is an issue are required. 

The following table outlines some guidelines for dealing with scope creep.  They seem straightforward, but it’s often the ‘obvious’ solutions that are no implemented consistently

  1. Scope not clearly defined up front – Review scope of work with client, use this as an opportunity to revisit fee for service
  2. Problems with quality of data received – Identify specific issues, then discuss with client options for addressing internally or giving the firm responsibility
  3. Internal pick up and put down of work – Establish clear work in procedures, take responsibility off client manager and give to administrative support staff
  4. Issues with financial reporting – Identify a system or process that will address issues with accuracy or timing of reports
  5. Under-estimating time for meetings – Provide client with meeting options including meeting time, frequency of meetings, face to face vs online meetings
  6. Client requests out of control – Log client requests including phone and email time. Then arrange a time to meet with the client to review causes and develop solutions
  7. Lack of internal leverage – Look for ways to delegate work to accountants and administrative staff, especially processing, reports and client care contact

This assessment task and response is taken from the Path to Partnership eLearning Course. Click here to explore this course

Also, take a look at the Responsible Workflow Manager eLearning Course

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