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CPA Advisory Services

The value of setting up client scope for your firm and clients

Client scope challenges are not a trend, they have been here forever. It’s a known fact that not having clarity of scope can impact profits and workload.

A recent blog post based on an episode of the Pulse of the Practice podcast talked about advisory services and we used the word “scope” to describe the work your firm does for clients. In the latest podcast episode, “Client Scope”, we took a more detailed look into what client scope is and how having an unclear idea of scope can be problematic for your firm.

Many firms who have wrestled with issues of client scope have accidentally over invested in work. It can be easy to find yourself in a situation where you realize you and the client didn’t have a solid agreement on what that work would mean from a scope or billing perspective, but maybe you feared losing the client, so you did the work. This is a battle that most, if not every firm, has faced.

How do you know you are lacking in client scope?

A large part of dealing with scope ultimately comes from experience. If you realize that you are getting overloaded with work from your client, but aren’t being compensated, that is a sign that scope was not defined from the beginning. Scope is the number one thing to define if you are wondering what to start charging for certain work or want to make clear expectations of the client relationship and what is expected of you as a firm. It’s important to have that scope clear, and not let your firm’s work  become undervalued, from that initial engagement, it’s got to start with scope.

For many firms, not having a defined scope of business is your biggest problem. The first thing you need to do with a client is teach them what’s included, what’s not included in the agreed upon services you arrange with them.

Define client scope at the beginning of the client relationship

If a potential client walks in your door, the first thing you need to do is make sure that they understand the scope of what you can do for them and the cost up front, and then document it preferably in an engagement letter. Ideally, you want clients who are looking for an engagement where you can start talking about planning and concepts, teaching, and strategy not just tax returns. You need to draw that clear line of what’s included and what’s not included in the services offered.

An easy exercise for your firm is to sit down and figure out what you charge for specific services to define the client scope. If you find yourself scratching your head with uncertainty, it’s easier to start with what’s not included as this is a good way to define your scope. Start  by saying, “If I provide payroll, what do I do and what is it that we are not?” “We are not a benefits provider, we’re not a plan administrator, etc.” That is a critical point for a lot of firms when they go down this path of deciding how they want to be a trusted advisor versus just selling transactions.

All of this thought brings to mind the word “boundaries” and how it’s important to set them with a client early on. Clients will often try to push the boundaries of the client/firm relationship if scope isn’t clearly defined. You might find yourself avoiding clients because they’re asking you so many questions or demanding so much work from you that wasn’t agreed upon, but the boundaries were blurry from the beginning. This is not a good business practice. Instead of responding out of fear, or avoidance, you can use the opportunity to describe a new engagement, to define what’s included and what’s not included so everyone is clear.

One of the most common ways to avoid these client scope pitfalls if they happen, is ensuring your firm pricing is clear about services rendered, whatever the model is that you use for pricing of tax returns, payroll, accounting or other services.

It is not uncommon for your firm to feel strongly about helping clients, and even managing many different advisory services for the client, but you need to define that. If you don’t define it, your firm can’t complain about working for free because you may not have set up the client relationship to make sure that you and the client understand the rules of the relationship.

When you think about the word boundary, or scope, sometimes it can have a very negative connotation. You might think about a boundary as a big brick wall, but the reality is that boundaries can be moved. You and your client just need to agree on what it means if you move the boundaries. If you have a written agreement with the client up front, you can avoid being caught in a vortex of uncertainty and expectation so there’s no miscommunications because everyone is in agreement from the beginning.

Quality payroll solutions are a worthy investment

If you think about it, when was the last time you paid for something that was good, you said, “Wow, that’s cheap.” That rarely happens. No one likes dealing with clients who are feeling they were surprised with charges they didn’t know about. Defining scope ahead of the game can create a paradigm shift by getting that key information to the client up front.

It’s important to define those boundaries at the engagement point of the client onboarding process, as it produces bi-directional comfort. It’s not just for your firm’s comfort, it’s for the client as well. When the client knows exactly what is being provided to them as a service, they aren’t as likely to question the bill because they know what they agreed upon. If the client scope isn’t clearly defined, they are more likely to look at it very closely because they want to see what they are being charged for and they may have questions. If you can establish that client scope early on you are not going to waste your time and energy on work that you may not be able to recoup because there wasn’t a solid understanding on the front end of the client conversation.

As CPAs, your jobs and doing the work is hard enough. If you are questioned by the client because they’re wondering why you charge so much for this or that, it just makes your firm’s job that much harder. You can avoid confusion by just taking the time to ask yourself as a firm, “What are we trying to do here? What’s the body of work? What’s included, what’s not included?” And define that up front for people.

Parting thoughts are to setup that boundary or scope up early. It’s good for you and it’s comforting for the client. With clearly defined scope, you both have a mutual understanding of what’s going, what it’s worth, what that value brings, and both will operate fluidly as you move forward.


Listen to the “Client Scope” episode of the Pulse of the Practice podcast on your preferred platform (Google PlayAppleSpotifyStitcher) or here.


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