Professional Services Cost Control

Install controls for professional services spend: accept SOWs safely, manage time and materials burn, prevent pass-through abuse, and estimate overruns before they hit the budget.

Collection

Professional services spend leaks when work is approved without a control system.

This collection installs a beginner-safe operating system to:

  • accept statements of work (SOWs) without hidden risks
  • control time and materials (T&M) burn before budgets explode
  • prevent pass-through expenses, markups, and scope creep
  • quantify overruns early with a simple estimator

This is value chain intelligence applied to services:

  • Procurement: scope, rate cards, terms, renewals
  • Finance and AP: invoice standards, dispute hygiene, leakage prevention
  • Operations: delivery governance, change control, forecasting

Who this collection is for

  • Finance and AP teams dealing with unpredictable invoices
  • Procurement teams negotiating SOWs and rate cards
  • Project owners managing consultants, legal, or implementation vendors
  • Operators who want savings without breaking delivery

What you will install

By the end of this collection, you should have:

  • a repeatable SOW acceptance checklist (so bad SOWs do not get signed)
  • a weekly T&M control cadence (so burn is visible and managed)
  • a pass-through expense policy (so travel and extras are defensible)
  • a simple overrun estimator (so you can escalate early with evidence)

How to use this collection

Follow this order. Do not skip step 1.

  1. Install the front-door control (SOW acceptance)
    Use:

  2. Install the execution control (T&M burn governance)
    Use:

  3. Install the leakage control (pass-through expense rules)
    Use:

  4. Quantify risk and escalate early
    Use:

Beginner-safe definitions

Professional services: Paid expertise delivered as work (consulting, legal, accounting, implementation, engineering contractors, managed services).

SOW: Statement of Work. Defines scope, deliverables, timeline, roles, pricing, and acceptance criteria.

T&M: Time and materials. You pay based on hours and rates (and sometimes expenses).

Pass-through expenses: Costs the vendor charges you in addition to labor (travel, meals, subcontractors, tools).

Scope creep: Work expands without a formal change process.

Why services spend leaks

Most leakage is predictable:

  • SOWs are signed without acceptance criteria and invoice requirements
  • T&M work starts without weekly burn reviews and thresholds
  • rate card rules are unclear, so billing drifts
  • pass-through expenses and markups are not controlled
  • change orders are informal and late

What good looks like

Weekly, you can answer:

  • What work is in scope and what is not?
  • Is spend tracking to plan or drifting?
  • Are bill rates consistent with the rate card?
  • Are expenses pre-approved and documented?
  • Do we need a change order now (before the invoice surprise)?

Metrics to track (simple)

  • % of SOWs accepted with invoice requirements and acceptance criteria
  • T&M budget consumed vs plan (weekly)
  • billed effective rate vs contracted rate
  • pass-through expenses as % of total (trend down)
  • number of change orders initiated before budget overrun

Use this with these core controls (optional, but powerful)

Install this operating system

Generate a step-by-step implementation plan for this collection. Use it to assign owners, sequence the work, and track completion.

Generate implementation plan

Included resources and tools

Professional Services SOW Acceptance Kit

Resource

Time and Materials Controls Playbook

Resource

Pass Through Expense Controls Kit

Resource

Effective Rate and Overrun Estimator

Tool

Change log

v1.0 (2026-01): Latest release