When projects end up taking longer than you expect, you end up making losses on the job.
How do you solve that?
I’m going to share with you a 7-step framework to stop you suffering from scope creep ever again.
Have you ever got to the end of a project, produced a work in progress report and realised you spent way more time on a project than you initially thought you would, but have no idea why?
You end up having to write time off to make sure the client will pay your bill – you end up making a loss.
You need to become more aware of scope creep and be able to spot when it is happening. If you know what to look for, you can identify scope creep and deal with it before it becomes an issue and costs you money.
You should deal with scope right at the outset of the project. You should discuss it in the pricing conversation.
Be really clear on what you are trying to achieve for your client. What is their desired outcome for your work? If a small task or odd job crops up, consider whether it is actually relevant to your current project, and whether it will benefit the client and get them a better result or not.
If it won’t help them, or if it’s a completely separate job, you should probably charge for it.
In that initial conversation with a client, you need to both have complete clarity over exactly what is included in the scope of the work.
It needs to be put in writing in the fixed price agreement or proposal. Set out exactly what you are going to do, and what is NOT included.
Manage the client’s expectations so they know what things are extra. Then if they ask for those extras down the line, it will be easy to refer back to the agreement to remind them of the extra price for that work.
Make sure the document that outlines the scope of the work is signed by both you and the client.
The client must agree in writing that they understand what the scope of the work is.
You need to communicate with your client to make sure they understand the scope, but you also need to communicate that scope agreement to your team.
Your team will probably be focussing on delivering the best possible service to your clients and might happily accept extra work with no complaint. However, they also need to be able to recognise changes in scope and extra tasks that fall outside of the scope agreement.
You will need to adjust the price for those extras, so you need to make sure your team also understand the scope of the work and know what to do when the scope changes.
If a client does ask for you to do some extra work or something that falls outside of the scope of work, you need to have some scripts prepared so you know exactly what to say to them to address the change in price.
If you have completed the previous steps correctly and managed the clients’ expectations about the scope of work, this conversation should be fairly straightforward.
“When we first agreed on the project, we told you what work we would be doing and what things fell outside of the scope of that work. We notice that [x] has now happened, so we will need to review your price.”
As part of that script, what you could do is give the client a choice.
For example, it may be that at the outset the client promised to deliver the books and records in a certain format. After starting the work, you may realise there are things missing, incomplete or incorrect. You can go back to the client then and say…
“We’ve spotted these problems. There are 2 options. We can sort this out for you, however there will be an extra charge of [x]. Or we can return the books to you to solve the problems and you can then send them back when they are suitable for us to continue the work.”
Clients love choice. By framing the price rise in this way, you are not forcing it on them. They can deliver on what they promised, or they can pay an extra fee for you to do it for them – the choice is theirs to make.
The majority of the time the client will just ask you to do it. That’s great – you get a bigger fee.
Get together with the key members of your team and ask some questions:
Overtime you will become more and more aware of scope creep and put systems in place to deal with common issues. But there will always be new things that crop up that you don’t know how to deal with.
That’s the nature of accounting and bookkeeping work – it’s complex. Things will come up that you hadn’t considered before. You can’t be prepared for absolutely everything.
But you can learn from it, update your systems and make sure that if it happens again you will be ready to deal with it effectively.
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Wishing you every success on your pricing journey.
Chartered Accountant, Public Speaker and Author of Amazon No.1 Best Seller, “Effective Pricing for Accountants”
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