Stephen Covey coined the phrase, " begin with the end in mind." And it's the way all successful projects should start. Knowing where you want to go and having a plan to get there is the beginning of success and key to managing your project risk. Don't stop there, though. Run a smooth job from start to finish by following these essential steps.
Step 1 – Scope the Project
The first thing to figure out is the proper scope for your project. What is it you want to achieve? What's the goal? You need a clear understanding of the specific purpose and objectives. Have you ever started a project and been working diligently only to find you had to back up and head in another direction? That's probably because the scope wasn't clear, or it changed along the way. Get your scope correct up front, and the rest of the planning gets easier.
Step 2 – Outline an Action Plan
Once you've determined the scope, the next phase is an action plan. Defining the steps to take helps you think through how a project will be accomplished. It'll also aid you in seeing potential roadblocks and challenges. Maybe there's a step of which you and your team are unsure. Take the time to research and figure out how to get over the hurdle. It'll help you better understand how long a step will take to complete. Once you have the steps outlined, be sure you've allocated enough time to finish each one. This is key to producing a quality work product and ensuring your job risk has been managed appropriately.
Step 3 – Create a Fee Estimate or Range
With a clear scope and action plan, the task of creating a fee estimate or range gets easier. When you generate the fee estimate, consider items like the complexity of the job, the level of staff you need to use, the time of year, and the quality of client information, just to name a few. There can be numerous other considerations, but these are some that occur with every project. What kind of margin do you need to have to make this a good fit for the firm? Don't sell yourself short. It's usually a lot easier to negotiate a fee up front than have to go back later and ask for more money.
Step 4 – Get Approval from the Client
The scope, action plan, and fee estimate should be outlined in a clear and concise engagement letter. Have an engagement letter for all work, if possible. If not, be sure to have one for larger, more complex jobs. No matter what, document your understanding of the project in your files. If there's a chance for misunderstanding what needs to be completed and who's doing it, have an engagement letter. It's undoubtedly a CPA risk management best practice.
Step 5 – Execute Plan
With your signed engagement letter in hand, it's time to start the execution phase. If multiple individuals in the office use staff and lead work, be sure the team members you intend to use are available. Block their schedules for the work. That way, you won’t get halfway through only to find that your staff have disappeared onto another job. The bigger the practice, the more critical that staff scheduling becomes.
Set specific dates for completion of milestones. Check in regularly with the team and the client. Excellent communication is vital to sound risk management on projects. If an unanticipated issue comes up, make sure that staff know what to do. Have them stop work and get with you. Come up with a game plan to get over the challenge. If it's something that'll throw the timing off, discuss it with the client as soon as you can. If it changes the scope, work with the client to determine any new fees and timing. Things do come up. But, it's how you handle them that determines how well you manage the risk.
Step 6 – Document Results
Documenting results is another crucial risk management tactic. That's why not only best practices but regulatory authorities and professional standards demand it. Train your staff to do a stellar job on documenting and workpaper preparation throughout a project. There's nothing more time consuming and wasteful than having to go back later and update documentation. Besides generating zero revenue, going back later to detail files causes faulty recordkeeping. Memories aren't good enough to result in quality documentation later.
Documentation can also be used as a tool for other proposals or projects. If you've completed similar work before, don't reinvent the wheel. Use the high-quality documentation from a prior project to assist with generating workpapers for the new project. It'll help build experience more quickly, leading to greater knowledge and fees down the road.
Step 7 – Review Work Product
Just like documenting, review of work is essential. Having a second, or even third, set of eyes on a project can help to ensure that the results are credible and correct. Have a robust review process for every project and leave plenty of time for review comments to be addressed. It not only helps to manage work product risk but reputational risk as well. Mistakes are long-tail events. A robust review of every project before it goes out the door can keep slip-ups from leaving the premises.
Step 8 – Deliver on Time
Delivering on time helps meet client expectations and makes missed deadlines non-existent. One of the quickest ways to upset a client is to miss a promised deadline. Make it a non-negotiable item in the office. Always deliver on time. If you and your team have been managing the project well, delivering on time is just part of the smooth process you've developed. Keep managing project risk all the way to the end and provide quality work products on time, every time.
Step 9 – Evaluate Results
While delivering a project is indeed a milestone in the process, it's not the end. Once a project is delivered, make sure the final billings are complete and evaluate the project internally. Was the expected profitability met? If not, why not? Were there any new best practices developed from project learnings? Did staff perform at expected levels? Don't skip this evaluation. You may get important takeaways to apply to other parts of your practice.
Step 10 – Get Feedback from Client
Finally, get feedback from your client. If the project went exceptionally well, see if the client will give a testimonial. If they won't, be sure to understand why. Sometimes, clients won't do testimonials no matter how excellent the work. But, if it's not that, seek to understand. If you thought the job went well and the client isn't in complete agreement, listen carefully and take notes. Clients want to be heard. They want their needs met. Keeping clients happy is another critical risk management best practice.
No one said that running projects was always going to be easy. But, with these steps, you can keep things flowing smoothly from start to finish. And that's an important element to CPA risk management.