How to avoid scope creep in your advisory engagements

Share this article:

Table of contents

Scope creep is a common challenge many accounting firms face, arising from expanding client demands beyond the initially agreed-upon scope of engagement.

The root cause often lies in unclear agreements and inadequate communication, leading to client frustrations, burnout among team members, undervaluation of services, and potential client loss. The last thing your firm needs is to give away work for free, so how can you receive appropriate compensation without endangering your relationships with clients? Addressing this issue requires a proactive approach to effectively define and manage project scopes.

Scope creep often becomes a problem when routine work expands beyond what was originally planned. As firms look for ways to keep delivery consistent, many are turning to AI to streamline repetitive processes and reduce the manual effort behind client work. Our AI ROI Calculator helps estimate how those efficiencies could affect team capacity, operating costs, and overall margins.

Clearly defining and pricing advisory work makes it easier to protect your margins as your services evolve. Use our CAS Revenue Calculator to understand how well-scoped advisory services can translate into predictable revenue.

The engagement letter

The first step in reducing this problem is to define the range of services that will be performed for each client. In our firm, we like to say, “To be clear is to be kind.” I highly recommend implementing a written engagement letter for every client that outlines the services and tasks being offered. Even more important: We’ve found that including a list of services outside the agreed-upon engagement can encourage dialogue on the front end and reduce assumptions on both sides.

A person and person sitting next to each other.

Free eBook

Grow Your Firm With Client Advisory Services

Fuel client growth, increase revenue, and support your customers with CAS.

Download Now

Beyond defining tasks, your engagement letters can incorporate timelines and offer ranges of hours for larger one-off projects. For example, in the discovery phase of onboarding a new client, you could find that a significant cleanup from several previous years is needed, but might only have the margin to complete that task over a year. If so, include the timeline for your client in the scope of work.

Providing clients with a range of potential hours also gives your firm the flexibility to absorb unforeseen issues that often come about with these kinds of tasks. When the scope increases, proactively communicate it! Your clients’ needs will be ever-changing, meaning their engagement letter should be a working document.

Your firm might be among the many that operate completely in an hourly billing environment. The temptation with hourly billing is to assume that engagement letters are irrelevant, since charges can be passed along regardless of the services provided. While that’s true in theory, clients have a specific budget in mind for your services. A clearly defined engagement letter can help facilitate future conversations when those clients’ accounting needs grow with their businesses.

A clearly defined engagement letter can help facilitate future conversations when those clients’ accounting needs grow with their businesses.

Have a process for questions

Speaking of growth, the best way to implement changes and eliminate revenue loss for your firm is to have a process in place when questions about project scope come about. If your team is like ours, they want to serve your clients' needs. When a client asks for additional services, the tendency can be to automatically accommodate that request. Having easy access to each client’s engagement letter will help your team recognize when requests fall outside the current scope.

Using a practice management tool such as Karbon, you can prepare email templates with pre-determined scripts, allowing your team to respond in the moment in a kind, authentic way. Those scripts can double as prompts during a phone call with a client. It could be as simple as saying, “We would love to do this for you! Please give me a day to check into it.”

You should also have a clear plan for notifying all stakeholders responsible for adjusting any scope of work. Again, a practice management tool offers a centralized way to silo internal team discussions and even offer mini-proposals with scope adjustments to clients.

Don't let scope creep stand in the way

Rather than being a nuisance, scope creep signifies that your clients trust you to grow with them, and presents an opportunity to enhance service delivery and revenue generation. By embracing proactive scope management practices, your firm can cultivate healthy client partnerships that deliver value over time!

Learn more about Client Advisory Services

Building your Client Advisory Services offering is about people, processes, and technology. Download our Grow Your Firm CAS eBook to learn more, or read more about these elements in our client advisory services series: