Create a budget that details costs and expenses

Before contracting with you for service, your client will want to know exactly how much the project will cost them. Costings include consultancy charges and any expenses that will be incurred and recharged to the client.

There are many ways of developing budgets for your projects. You can create budgets in accounting and project management software, or manually using spreadsheet software such as Microsoft Excel.

A confidentiality, or non-disclosure, agreement demonstrates both the client’s and the consultant’s commitment to preserving the privacy of each other’s business interests.  The level of confidentiality that must be maintained depends on the unique nature a specific engagement.

A sample confidentiality agreement is available here.

A letter of engagement is a formal agreement between a client and consultant, and is also referred to as a contract. This agreement binds the consultant and client together for the length of the consulting engagement. It illustrates the intentions of the client and consultant to work together in a specified way for a definitive period of time in order to achieve particular goals. Ultimately, this document holds all of the information included in the initial proposal along with a signature block to illustrate agreement.

A sample letter of engagement, or contract, can be accessed here.

An overview of the requirements for success before the assignment, based on the Offering Phase in the EN 16114 Management Consultancy Services Standard, is set out below:

PurposeTo reach an agreement between the consultant and client on the services to be provided.
InputInclude perceived needs, expectations and desire of the client, potential constraints and risks, and any significant changes beyond the scope of the change control process.
OutcomeA legally binding agreement between the practice and the client specifying the services and the deliverables, and establishing the rights and obligations for each of the parties.
A proposal from the consultancy practice to the client should include typical contents as below:
ContextBackground information, assumptions, scope and limits – relevant facts, e.g. organisation’s current situation, client’s objectives, why work needs to be done, assumptions and their impact, and scope and limits of assignment; ensuring the client understands the need to share all relevant and significant information. 

 

Constraints and risks – as known and identified; risks monitored during Execution phase. 

 

Stakeholders – Specified in this section.

Services & deliverablesDescription of services, outcomes, and deliverables or outputs. Specific, measurable and achievable, relevant and time-bound objectives so results can be evaluated.
Approach & work planWork plan for operational planning of the services including, as appropriate,:

– objectives, scope;

– change management;

– contents;

– documentation;

– data, information and technological resources;

– organization;

– consultancy practice’s human resources and their responsibilities;

– client’s human resources and their responsibilities;

– timetable;

– project management methods (including acceptance stages, notification of delays, decision process, stages for assignment delivery, methodology, etc.);

– communications (including channels, methods, etc.);

– escalation procedures (in case of deviations from the agreement);

– quality programme;

– deliverables or outputs.

Roles and responsibilitiesRoles, responsibilities & resources specified (incl. client personnel, data & documentation).

 

Assignment monitoring and control – decision-making, direction and control processes, including designation of project ‘sponsor’ or project ‘leader’ for project governance role; processes consistent with client’s corporate governance. 

 

Evaluation of the assignment – how evaluation is carried out, e.g. measurable milestones, how objectives are evaluated and to whom interim and final evaluation results reported.

Terms and conditionsCommercial terms – terms and conditions, fees & charges, payment schedule, expenses, etc. 

 

Contracting standard terms and conditions – pertinent to relevant legal and regulatory requirements, and statutory obligations, e.g. ownership of material and outputs, user rights, licensing, intellectual property rights, liability limits, etc.; may refer to applicable professional standard, and to governing law for cross border and international services. 

 

Policies – requirements, responsibilities and activities relating to policies applicable such as the regulatory framework, communication, ethics, corporate social responsibility, capability, quality, guarantees, health and safety, and any other agreed item.

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