Engagement letter procedures

Engagement letter procedures

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Just wanted to begin a debate on what procedures accountants take with regards engagement letters and terms and conditions.

Just had an interesting conversation with Tony at the ICPA. 

Some practices issue one full engagement letter/terms covering ALL services at the start.  Signed by the client and then kept on the file.

Some issue terms and bespoke engagement letters for only those services that are relevant.  Additional letters are presumably sent if and when clients take out additional services.

Some even send a new engagement letter each year!

Finally I assume nowadays some accountants have an online (web based) system.

I've always adopted the first option but ideally I'd like a much more compact set of terms and engagement letters. 

Any thoughts? 

What do you do?

Replies (3)

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Universe
By SteveOH
20th Mar 2014 09:37

Every year but not the full set

In year 1, I send a 2 page engagement letter containing general information and details of the fee for that particular year.

I also send one or more detailed schedules (personal tax, company tax, vat, payroll, enquiries - whichever is/are applicable and each 2 pages in length) depending on the services they require from me. These schedules will be quite detailed, explaining what I expect from my client and what they can expect from me.

I also send a 1 page Terms of Business.

In year 2, I just send the 2 page engagement letter containing details of the new fee. If they require additional services from me, then I send a new engagement letter and relevant schedule.

As an aside, I send all these by email and get them to sign a copy of the main engagement letter electronically.

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By ShirleyM
20th Mar 2014 10:06

We still use paper

We have a one-page LoE that lists the services they are 'buying' and each service points to the relevant section in our T&C (which covers all services plus general T&C's).

They sign it when we do the MLR checks.

If they change the services we issue a new one page LoE.

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Teignmouth
By Paul Scholes
20th Mar 2014 14:00

All electronic

All terms & conditions, common to all clients and types of engagement are on the website, with a hyperlink from the actual "Terms of Engagement" front sheet.

We then have (on Iris Automail) separate terms of engagement for each service, eg accs prep (one each for Ltd, Self employed etc), tax, management accs, VAT, statutory etc etc and put these together into a PDF pack, to match types of client (eg Ltd Company with accs, tax & stat) together with a front sheet which includes white space for each client where we specify special notes and, most importantly, to show bits of the standard services that won't apply (ie like an insurance schedule).

Each client in Iris is categorised by a code (the above is LTD01) and the relevant pack is uploaded to Iris Openspace for the client to download and approve electronically.

They are reviewed each year and any minor changes agreed by email.

 

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