In today’s episode of ‘From the eLearning Trenches,’ we asked one of our learners, a partner in public practice, to review the 10-step process for managing scope of work outlined in the Client Manager course. Identify specific actions that you can take now to better manage scope and fees as jobs proceed.
Learner Reflection
Whist we manage scope of work well, issues do arise from time to time. There are a number of steps we can take to improve the way we communicate with clients in relation to scope of work and fee for service.
- Ensure that the initial engagement is clear: Develop a detailed project scope document outlining objectives, deliverables, timelines and client and firm expectations. We can schedule a kick-off meeting with the clients to review and confirm the scope, addressing any concerns upfront.
- Ensure that the engagement is approved: Have formal approval from the clients on the agreed-upon scope, fees and terms outlined in our engagement documents. Keep and document client approval through signed contracts or written confirmation to show a clear understanding of expectations for the client and firm.
- Allocate responsibility for changes in scope: Have a designated project manager or engagement lead responsible for managing changes in scope and ensuring alignment with client expectations. We can implement a formal change to control processes to assess, approve and document scope variations and associated impacts on feels and timelines.
- Re-engage the client annually: Schedule regular review meetings with clients on a basis to assess progress, discuss changes in objectives or priorities. We can use this as an opportunity to reaffirm the engagement, update agreements and reinforce the firm’s commitment to delivering value.
- Allocate special matters to new agreements: Establish separate agreements or addendums for special matters or additional services that fall outside the scope of existing engagements. We can clearly define the scope, fees, and terms for these matters to avoid scope creep and ensure proper compensation for additional work.
- Complete a budget analysis up front: We can budget analyse each engagement to identify potential cost drivers, resource requirements, and budget constraints. By doing this we can use historical data, benchmarks and project estimates to develop cost projections and establish and raise realistic fee structures.
- Ensure WIP review is completed: Implement regular work-in-progress (WIP) reviews to monitor project performance, track expenses, and identify any deviations from planned scope or budget. By addressing any WIP issues proactively, such as budget overruns or scope changes, through timely communication and appropriate adjustments to project plans.
- Conduct pricing review: Review pricing structures periodically to ensure they remain competitive, aligned with market rates, and reflective of the value delivered to clients. Consider factors such as inflation, resource costs, and changes in scope or service offerings when conducting pricing reviews.
- Manage fixed price agreement proactively: Monitor fixed price agreements closely to ensure profitability and mitigate risks associated with scope changes or unexpected expenses. Implement effective project controls, such as regular progress tracking and milestone reviews, to manage scope creep and maintain profitability.
- Be aware of time cost and value pricing: Consider both time-based costing and value-based pricing approaches when determining fee structures for services. Balance the cost of resources with the perceived value of the services delivered to ensure fair and equitable pricing for both the firm and the client.
Feedback from our experts
Managing scope of work is pretty simple for regular tax compliance jobs. There are clear systems and processes around completion of work and any issues that may affect scope can be identified relatively easily.
It’s also relatively easy to identify special projects that lie outside existing scope. Often, these will arise when the client requests support beyond existing work. In these cases, a fee estimate can be provided and agreed before work commences. Generally, challenges arise when small variations in scope arise, perhaps as a result of changes in the way data / information is provided or as an outcome of client requests that don’t necessarily warrant a ‘new work’ proposal.
Of course, no client manager wants the client to feel that every phone call or email is ‘clocked’ and charged, either directly or indirectly. However, accounting firms need to be compensated for the time and value of work completed. This can generally be addressed by letting the client know upfront the level of contact / communication that forms part of the agreement. Does it include regular meetings or reviews? When a service is considered by the client to be ‘commoditised,’ then they will expect everything associated with the service to be included in the fee.
In this example, the learner has identified some simple steps that can be taken to improve the level of ongoing communication with clients in relation to scope of work.
Regular communication with clients throughout the project is essential to manage expectations and address any concerns that may arise. By keeping clients informed of progress and any issues that may impact the scope, timeline, or budget, you can foster a collaborative relationship.
Use these interactions as opportunities to remind clients of the agreed scope and discuss the implications of any requested changes. This proactive approach can help mitigate scope creep by addressing issues promptly and reinforcing the parameters of what has been agreed upon.
What should you be doing to better manage scope of work with your clients?
Key takeaway: Managing scope creep effectively is crucial in accounting firms to ensure projects remain on budget and schedule while meeting client expectations. The key is always proactivity in communicating with clients as work proceeds.
This assessment task and response is taken from the Client Manager eLearning course (assessment task 4.3). Click here to explore this course.
Also, take a look at the Responsible Workflow Manager eLearning Course.
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