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Fixing the fundamentals: Scope, billing, and engagements
accountants and bookkeepers

Fixing the fundamentals: Scope, billing, and engagements

Accounting and bookkeeping professionals have gone above and beyond to support their small business clients over the past few years. Economic uncertainty, lockdowns and various government grants created significant workload, with a lack of staff to meet demands of client work.

For many advisors, this focus on their clients’ business and rapid response to changing needs meant work that should have been engaged on as new work, wasn’t; which resulted in advisors working longer hours without increasing fees.

Managing this scope creep has been an ongoing issue for accountants and bookkeepers. It occurs when you complete work that wasn’t covered in the initial engagement. This is not only an insidious drain on your revenue and profit, it can also damage relationships with clients.

It doesn’t stop there. There’s a risk of scope creep every time you do work for a client who hasn’t engaged with your agreed fee. It can also occur when you’ve been engaged but stepped outside the contracted parameters because the data isn’t as clean as you expected, or you needed to spend time checking over the work of other people in your team.

Banishing scope creep leads to better client relationships

The root of scope creep is a mismatch in expectations.The fastest way to eliminate this in your practice is to reset your client expectations. If you haven’t made it clear that you charge for all of the services you provide, your clients are bound to feel frustrated if extra costs suddenly appear on their bill. Sound relationships are built on the trust that comes with honesty and transparency in charges, as well as advice.

The past couple of years have left both accountants and bookkeepers particularly vulnerable to undercharging.They’ve had their back against the wall helping clients through challenging times. Often, advisors simply haven't had time to stop and think about the way they're doing business, or whether they’re being paid in full for the value they continue to deliver. This is something you need to take into consideration.

Fortunately, a robust engagement process can mitigate the risk of scope creep in your practice, and affect positive change in your client relationships.

The team from Intuit QuickBooks have held a number of webinars and events recently on scope creep and engagement, and we regularly speak to our users regularly about the common causes of scope creep, and how ‘fixing the fundamentals’ can help firms take control of their client relationships, improve their cash flow, and provide certainty for both their firms and their clients.

Take the stress out of managing your firm

The role of the engagement letter

A robust engagements process can stop scope creep in its tracks. As well as helping you grow your business it can also reduce your business insurance premiums. In fact, many insurers insist you provide detailed engagement letters in order to mitigate the risk of successful litigation.

It all starts with an effective engagement letter, which is effectively a contract between you and your client. It establishes a culture of transparency and honesty by spelling out responsibilities and obligations on both sides, which lays a solid foundation for sound working relationships. And, by providing full details of your fees, how you charge and what you charge for, it leaves no room for scope creep to worm its way in.

You can base each engagement letter on a template to save time and ensure nothing is overlooked. However, this isn’t something to set and forget. A regular review will help you identify any change in circumstances or work requirements – or even the impact of something left-field as the pandemic. You can then discuss necessary adjustments with your client well before they appear on an invoice – or before you give money away by absorbing extra costs.

In this e-book, titled Fixing the fundamentals: Scope, billing, and engagements, Shaye Thyer and Rebecca Mihalic, Heads of Accounting at Intuit QuickBooks and Ignition respectively, look at how to you go about removing some of the roadblocks in your way, building an engagement process that works, and how you can create a letter of engagement that sets expectations, beats scope creep, and can even help increase your profits.

Thyer and Mihalic also look at how to leverage technology such as QuickBooks Online Accountant and Ignition to improve your engagement process, reduce headaches for your team and your clients, and banish scope creep once and for all.

Download the e-book now, and don’t forget to check out our EOFY Hub for more e-books, videos and checklists to help you work smarter, now harder this EOFY.

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