THE RADICAL CPA

When to Use Change Orders

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Mechanics do it and so can you.

By Jody Padar
Radical Pricing – By The Radical CPA

Change orders are the result of a well-scoped process. They occur when a client adds a service not included in their original engagement or when a manager or partner requests a service be scoped and priced separately. The client decides whether or not to proceed with the change.

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The process of a change order is similar to taking your car to the mechanic for an oil change. During a diagnostic, they find you need a tire alignment as well. The alignment is not included in the services you bought, but you’re curious to know how much it would cost. Depending on the price, you’ll add it to the original quote, or you won’t.

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Scope and Who Needs to Understand It

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Don’t let a partner do this alone.

By Jody Padar
Radical Pricing – By The Radical CPA

Partners, managers and accounting professionals must all understand scope to deliver the right amount of work for the engagement.

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Everyone needs to be aligned. Everyone needs to know what the customer ordered, how to deliver it and where the work ends.

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Let Your Team Fire Clients

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The customer is not always right.

By Jody Padar
Radical Pricing – By The Radical CPA

There are few ways to sink an accounting firm faster than winning bad clients. They will rob your profitability, steal your sanity and cause havoc among your staff and other client relationships.

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Ask yourself these questions and be prepared to walk away if you don’t get the right answers:

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Four Ways That Scoping Helps with Pricing

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Maximize benefits for both you and the client.

By Jody Padar
Radical Pricing – By The Radical CPA

Accurate pricing relies heavily on thorough scoping to measure the engagement, and good scoping defines the deliverables, sets the client’s expectations and calculates the labor it will take to get the job done.

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With that said, here’s how your scoping process helps you determine the ultimate price:

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How to Ward Off Scope Creep

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Everyone must know exactly what does and does NOT fall within the lines of scoped services.

By Jody Padar
Radical Pricing – By The Radical CPA

There’s a time to increase scope and a time to let it slide. Let’s explore these two options.

It’s professional responsibility to inform a client when a request is out of scope. In this instance, you have two options: either make it a separate engagement or include it in the existing service package. It’s important to have everyone on the same page about what is within scope and what falls outside of it.

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It would be best if you always built into your pricing agreements a 20 percent buffer to protect you against pricing mistakes. This doesn’t mean you should do work outside the scope for free, but if a client asks for a service not included, you could decide to let it go if the amount is immaterial.

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