Clarify Expectations with Written Agreements

Most businesses and nonprofits simply can’t afford to employ all the professional expertise they need to help them navigate issues around complex topics, like finance and human resources. Mistakes related to HR, finance or legal can be expensive. To avoid expensive mistakes, organizations get their professional services from a third party, or outsourced, provider.

Outsourcing for professional expertise can help tackle issues, or it can backfire and become an issue itself. This can happen when expectations for the services to be provided are not clearly understood by the organization and the professional. Assumptions about what words or terms mean and omitting specifics or requirements are the ingredients for a disaster recipe. The best way to prevent this sort of disaster from happening to your business or nonprofit is with a clear, written service agreement that both the organization and the outsourced provider can understand and follow.

A written service agreement clarifies expectations in four important areas:

  • Objective and Scope

Specify the results or accomplishments that the provider should achieve on the organization’s behalf and what the organization expects to get when the work is completed. For example, an agreement for an IT professional to install and maintain a new system would describe, among other things, the end state after the system is installed, tested, and released for implementation, as well as any ongoing maintenance.

  • Time Frame 

Specify delivery dates and how often your organization needs the services provided. Clarify any unusual needs you have, such as nights or weekends, to avoid misunderstandings that will prevent the organization from meeting its customers’ expectations. How would it look if a business or nonprofit couldn’t get timely financial statements to manage the organization’s performance? Highlight timing and frequency to make sure the needs are clear.

  • Quality

Describe the industry requirements, conditions, or format that are essential for the services to achieve the organization’s objective. Does the training class need to be two-hours long, taught by a credentialed instructor, and meet specific learning objectives? Are processes required to comply with any laws or regulations? Don’t presume that the provider will know all the organization’s specific needs. Put them in writing.

  • Cost and Payment

Last, but certainly not least, be clear about the total cost and when payment is expected. Specify what is included in the total cost and how that cost is calculated. For example, does the consultant cost an hourly rate plus expenses, or will she absorb those expenses? Are progress payments required based on meeting specific milestones? Accountability is easier to manage when performance expectations are stipulated are clearly documented in a service agreement.

All organizations need help with professional services that they cannot afford to hire full time. A clear service agreement can help prevent wasting time, effort, and money because the provider or the organization did not understand the scope, timing or requirements involved. A written service agreement is the single best way for organizations to clarify expectations and get the help that they need.