Scope creep isn’t going away. So how to manage it effectively?
‘Scope creep’ – two words we all dread! It happens when the requirements of a piece of work increase or the number of deliverables creep up over what was originally agreed, and the work runs over budget.
Scope creep is nothing new and it is something that most accountants will have experienced, but many have found they have encountered it more over recent months than previously. This may be that clients are more cost-conscious as a result of the pandemic and want to ‘get more for their money’, that the work has been badly scoped in the first place or the budget set was unrealistic.
In most cases, scope creep is not good news. The extra time spent is often not chargeable, being viewed as part of the original project and not an additional piece of billable work. Those few little items added start to add up and, before you know it, you have been doing a significant amount of work for free.
I have found scope creep to be more of an issue over the last six months than before. I have been working on a number of cloud accounting projects and in many cases that ‘end point’ took a lot longer to reach than originally planned.
I think part of the reason for this is accessibility. It is easier now to get hold of people as most of us are working from home and there is no need to jump in the car when we need a meeting. A quick email or text to ask for a Zoom meeting can lead to a pretty much immediate meeting via a video link. This is something that many of us would not have been doing 12 months ago and as a result we are more accessible, so it is easy to ask more questions and add some ‘little extras’ onto the piece of work.
I also think the type of work I have been doing is part of the reason I have encountered scope creep more. I have been doing a lot of work on cloud accounting projects and this can often grow beyond what was originally planned as new requirements pop up.
For example, when asked to recommend specific apps for certain tasks, the requirements can later increase beyond what was originally needed and so it is back to the drawing board - and that can be time-consuming!
Regardless of how scope creep has come about, if left to continue it can feel that the project is never-ending and the client views these ‘little extras’ as something you will usually do for no additional fee.
How to avoid scope creep
I have found scope creep really frustrating and it has led me to go right back to basics so that I can try to avoid it recurring as frequently in the future. As a result, I have made the following changes:
Scoping the work
I use proposal software to scope the work and I am now breaking the work down into much smaller segments so that it is easier to see what is included within that piece of work. In addition, rather than bundling tasks up under a single fee, I am instead listing each as a separate service with its own itemised fee.
I have really tightened the definitions of what work is included in each step and been as precise as possible. I have also made these definitions more detailed so what is expected at the end of the project is much clearer and so more easy to identify when reached.
Rather than undertake one big project with one fee at the end, through breaking the work down into smaller sections, it is much easier to identify key milestones over the project life. Attaching a fee against these milestones means that the payment is split over the life of the project and means you are not waiting until it is complete before issuing your bill.
This helps with your cash flow, but it is often something that the client prefers as it spreads the cost of the work out over a period of time rather than one hit at the end.
Asking for some initial payment upfront also helps when completing project work. It helps with your cash flow and also does mean that the client is committing to completing the project as they have invested in it at the start.
Upfront payments are new to many accountants and it can feel awkward when asking for payments to be structured in this way. But if we compare this to how many businesses structure their projects, an initial upfront payment is the norm and so many clients will be used to this form of payment profile.
It is also essential to monitor the progress of the project very closely with reference back to the scope throughout. Be aware of when key milestones are approaching and communicate this to your client in advance so they know.
Look out for scope creep throughout and act on it immediately. You may agree to add something for free but watch as these freebies can quickly add up if not monitored and then they become expected by the client. Close monitoring of the project will prevent this from occurring.
Lastly, build in some contingency into your work - that little bit of ‘wiggle room’. Yes, it is great to think your scope is spot-on but this really will depend a lot on the type of work you are doing. With cloud accounting projects, it is not uncommon for extra work to be needed at some point (eg the post conversion tidy up takes longer than planned). Therefore, building in a little slack will allow for some overrun in some areas.
If you find you were spot on and your scope was perfect, then you can always invoice the client less than your original quote!
Scope creep will not go away, and it will be something I know I will encounter in the future. However, I hope that now with these changes that it will be less extensive than before and more controlled in the future.