Accountants are some of the hardest working professionals out there. They frequently go above and beyond for their clients and unlike commission-based industries where the service provider clips the ticket and moves on to the next customer, the annuity nature of client work means that accountants have the best interests of their clients at heart and tend to work with families for years, if not decades, sometimes even serving multiple generations.
Accountants sell time, but they also frequently give invaluable advice that can save their clients thousands of dollars in unecessary taxes each year, meaningfully contributing to their post-tax profits.
We've found working with over 60 accounting firms in North America and Australia over the past five years that the hardest working firms that deliver the most value don't necessarily receive the remuneration they should.
The reason? It all comes down to scope management.
What is scope management?
Scope management refers to the process of defining, monitoring, and controlling the services agreed upon with a client. In accounting firms, this involves clearly outlining the work to be performed, ensuring deliverables align with client expectations, and managing requests for additional services. Without clear boundaries, projects can quickly grow beyond their original scope, leading to leaking profits and strained client relationships.
Scope management (what we call Scope Keep) is essential for accounting firms because it not only safeguards profitability, it helps maintain client relationships as well.
Neglecting scope management causes financial strain, client disputes, and reputational damage
Without proper scope management, firms risk working on unbilled or under-compensated services, which can erode profit margins. Misaligned expectations can lead to dissatisfaction, disputes, and even loss of clients. And inconsistent service delivery can harm your firm's reputation, making it harder to attract new clients.
The benefits of prioritising scope management
Improved profitability
The number one benefit of scope management is that clearly defined scopes ensure all services are adequately billed which maximises revenue and ensures your accounting firm is properly compensated for the value of the services that you deliver.
Stronger client relationships
Setting expectations upfront and quickly addressing changes to the scope when they arrise fosters trust with your clients and reduces misunderstandings. Good client management is built on a foundation of clarity of understanding. Clients will be more likely to ask for additional services if they know it will always be made clear how much it will cost.
Efficient use of resources
By managing scope effectively, you can allocate time and resources to priority tasks instead of wasting time delivering work requested by a client who didn't really want it in the first place and definitely doesn't want to pay for it. Don't let your clients manage you, use smart proposal engagement software to manage your clients.
Defining scope management
Scope management is the process of clearly defining, monitoring, and controlling the services provided to clients within agreed-upon parameters. For accounting firms, it means setting boundaries for deliverables, timelines, and fees to ensure a mutual understanding of expectations. Scope management also involves a proactive approach to identifying and addressing changes or additional service requests that fall outside the initial agreement.
Components of scope management
In order to manage scope creep you need to understand the three main areas in which scope creep can occur:
1. Defining scope
Scope creep happens because there is no clear outline of the services to be performed, including specific deliverables and exclusions. This can occur because accounting firms don't use engagement letters or fail to frequently (read annually) update their engagement letters with the clients.
2. Monitoring scope
Client engagements need to be reviewed regularly, inlcuding comparing the work the team is currently engaged in against the agreed-upon scope to identify where deviations may be occuring. Accounting firms that fail to update their engagement letters regularly, i.e. on an annual basis or when the scope of the engagement changes because of client requests or regulatory changes are prone to becoming victims to scope creep.
3. Controlling scope
Client managers and partners can control scope creep by managing and renegotiating additional service requests, ensuring alignment with business goals and resources. Good software can help with identifying where client requests fall outside of the scope of the engagement, however soft skills are required to have the conversation with clients around the cost of the changing scope.
By focusing on these three components of scope management, accounting firms can maintain operational efficiency, strengthen client relationships, and protect their profitability from the ever-present threat of scope creep.
Importance of aligning client expectations with deliverables
A critical element of scope management is ensuring that clients understand and agree to the deliverables. Misaligned expectations often lead to disputes, dissatisfaction, or additional work that isn’t compensated. By aligning expectations upfront, firms can foster trust, streamline service delivery, and enhance client satisfaction.
Firms don't have to sacrifice profits to keep their clients happy any longer. There's a better way.
Practical steps to improve scope management
Use engagement letters as a foundation
Engagement letters are the cornerstone of effective scope management. They are crucial for maintaining control in client relationships for three key reasons:
Engagement letters clearly define services
Engagement letters outline the specific services you will provide, along with deliverables, timelines, and fees.
Engagement letters set boundaries
Engagement letters specify what is not included in the scope to avoid misunderstandings or misaligned expectations. Building a culture where engagement letters are critical to outlining the services that are delivered and the costings of those services will train the clients to accept the boundaries you set.
Engagement letters establish accountability
You should use the engagement letter as a mutual agreement, ensuring both you and your client understand and agree to the terms.
By starting every client relationship with a robust engagement letter, you create a strong framework for managing scope effectively.
Regularly review engagements and update client agreements
It's common for client needs to evolve; it's actually a desireable outcome because when your clients grow and require more services, your accounting firm also grows. However, it’s essential to revisit and adjust your agreements when this happens.
Regularly reviewing your client engagements helps ensure your scope of services remains aligned with your client’s goals and circumstances. It also prevents scope creep;
periodic updates allow you to renegotiate terms when new requests or changes arise.
Regularly reviewing your client engagements also helps your firm maintain compliance, which is why so many professional bodies recommend or stipulate that firms that belong to their association keep agreements current. Regularly reviewing your client engagements also ensures adherence to legal and regulatory requirements.
Train your team on boundary setting
Empowering your staff to recognise and manage scope creep is crucial. You will need to train your client managers to identify where scope creep is occuring so that they can deal with it.
Your client-facing staff need to communicate what the change in scope will mean to the client. You should equip your client-facing staff with the skills needed to handle out-of-scope requests. It won't come naturally to your accountants. Think of it as a "sales" opportunity.
If your client-facing accountants don't currently participate in sales calls in your firm, why would you expect them to be able to handle what is essentially a sales call with an existing client?
You can foster accountability by encouraging your employees to document and report scope-related issues promptly so you can proactively deal with them.
As your accounting firm grows and you bring on more and more client-facing accountants, it can become difficult, if not down right impossible, to capture all the instances where scope creep is occuring, with firm owners only learning about the fact when they review their monthly write-off reports, if they find out at all.
Leverage technology for scope management
Addressing scope creep before it happens
Scopekeeper can help you catch scope creep before it happens, but turning scope creep into new revenue opportunities will require a team effort and soft skills training with your key client-facing accountants.
Identifying early signs of scope creep
Unclear or vague requests
Unclear or vague requests occcur when clients make additional requests that aren’t explicitly covered in the original agreement. We call these "thought bubbles" as the clients often won't think through what they are requesting, they're just thinking out loud and using their accountant as a sounding board. Reactive accountants will rush to complete the work before even confirming the client wants the work done by giving them a quote for how much it will cost. Putting a dollar amount next to the request helps the client value how much they really want the job done.
Increased time and effort
Look out for tasks taking significantly longer than planned due to unforeseen complexities. Every compliance job should have a time budget allocated that reflects the price the client is paying. In the accounting industry this is commonly alloted in hour increments. If a team or accountant seems to be taking much longer to complete the client work than is expected, one of the reasons can be the job was mispriced, either not taking into account the work needed or the volume of that work.
Frequent “small” additions
Frequent small additions occur when you observe a pattern of clients asking for “just one more thing” that cumulatively exceeds the agreed scope. This can happen frequently and isn't necessarily indicative that the client is trying to get free work, but when poorly managed it erodes profits.
Communicating changes proactively
Open and transparent communication is critical when handling changes to the scope.
To effectively manage the scope, accountants need to:
Acknowledge the request
Let the client know you understand their needs and are considering their request.
Clarify implications
Explain how the additional work impacts the timeline, resources, or costs.
Offer solutions
Present options, such as adjusting the scope, revising the timeline, or negotiating additional fees.
Proactively addressing changes ensures that clients feel heard while maintaining control over the engagement.
Negotiating additional fees or adjustments
When a request falls outside the original scope, it’s important to negotiate fairly and professionally.
You should:
Document the additional work
Clearly outline the new tasks or services being requested.
Communicate the value
Help the client understand why the additional work requires extra time, effort, or expertise.
Set clear terms
Update the agreement with revised fees, timelines, or deliverables and secure the client’s approval in writing.
Be firm, but flexible
While accommodating clients is important, protecting your firm’s profitability and resources should remain a priority. Negotiating adjustments ensures your team is compensated fairly while maintaining positive client relationships.
The cost of inaction
Neglecting scope management can have significant, measurable consequences for accounting firms.
These include:
Revenue loss
Studies show that businesses lose an average of 15-20% of potential revenue due to scope creep and unbilled work. Many firms also lose clients after failing to meet expectations or are forced to write off hours of additional, unplanned work, leading to reduced profitability and capacity.
Higher dispute rates
Firms without clear agreements are 40% more likely to face client disputes, leading to wasted time, potential legal costs, and dissatisfied clients.
Staff turnover
Teams working in poorly managed environments often experience burnout, with some industries reporting a turnover increase of up to 25% due to unmanaged workloads.
Why scope management is essential for accounting firm owners
Scope management is more than just an operational practice—it’s a critical strategy for ensuring profitability, maintaining client satisfaction, and fostering a productive work environment. By defining clear boundaries, addressing scope creep proactively, and leveraging tools to streamline processes, accounting firm owners can protect their resources and enhance their reputation.
Without effective scope management, firms risk financial strain, strained client relationships, and internal inefficiencies that can hinder growth and long-term success.
Start prioritising scope management today with ScopeKeeper
The time to act is now. As the business landscape becomes increasingly competitive and client expectations continue to evolve, prioritising scope management is no longer optional—it’s essential. Start by implementing engagement letters, training your team, and adopting technology to simplify the process. By taking these steps, you’ll not only safeguard your firm’s profitability but also position it for sustainable growth and stronger client relationships.
Take control of your firm’s future by making scope management a top priority today.
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