Engagement letters - simple method please?

Its that time of year when I look at this again but i am looking for something difffernt

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Before I start my ask in the way I run my firm yes I know I am mad and why would you do that but I work on trust and that trust is that if I don’t trust that the client will pay me I wont work for them to start with. If I think I may have difficulty being paid for work I wont take them on ion the first place!

To this end when I take on a client I give them an indicative quote – sometimes for small jobs a “maximum fee” but I don’t do any fixed fee work – even clients who pay me a certain amount monthly I occasionally send an extra bill to if I have had to do extra and never had an issue. All my clients have come from referrals and are known to existing clients so hopefully all trustworthy.

With that in mind I don’t issue engagement letters annually or use them as a tool to raise fees or protect fees etc I use them because I have to so they are fairly generic and say that I will bill them from time to time for work done – they don’t contain prices, rates or anything else to do with pricing. Maybe one day it will bite me but if a client doesn’t wasn’t to pay there must be something wrong with my service and so be it or they are the sort of person I don’t want as a client so good riddance.

So (and sorry for waffling) I am looking for a new set of engagement letters that are compliant and up to date – I really don’t want all the jazzy proposals and integration that comes with Practice Ignition etc (which annoyingly ACCA now say is the way forward so I guess they will stop issuing templates) – I just want a set of letters that are current and compliant and standard. At present I have one for tax return only (includes sole trader and property etc if applicable), one for partnerships, and one for ltd companies that covers accounts, CT, VAT returns, payroll, directors tax returns etc so they are engaged for everything if they choose the services  my clients are probably 70 small companies, 50 tax only cases and a few other bits

Can anyone recommend a current, compliant bit of software, set of letters that I can use and send out (once every 2-3 years to update for changes like we did for GDPR and impending MTD ITSA) – not too fussed about what the initial or monthly cost is I just want some I can not spend too much time on as I value my time far more than a few hundred quids !!

Any advice very welcome (even if it is to tell me I am an idiot !)

Replies (13)

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John Toon
By John Toon
01st Feb 2023 10:58

Well, you've already mentioned one and dismissed it (Ignition), your other options are GoProposal or Client Engager (both of which are essentially the same as Ignition). Alternatively you could look at something like Pandadocs (there are many other similar systems) - upload your templates and get them e-signed when issued. Or you could just stick with doing them in Word...

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Replying to johnt27:
Part on Dudes
By Partyondudes
01st Feb 2023 11:05

Thanks John

I am happy doing them in word as the letters are essentially all the same - i am just looking for some up to date templates withouht subscribing to some of the Apps that seem to only be about generating extra fees !

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By Sheepy306
01st Feb 2023 11:54

Download and tailor the ACCA free ones?

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Replying to Sheepy306:
Part on Dudes
By Partyondudes
01st Feb 2023 12:52

Thanks for the answer - I did used to do that (and that is what my current ones are based on) but the ACCA have stated that "the future is with Practice Ignition" so i am looking for another supplier/product that i know will be updated - the ACCA ones are over 3 years old last issued in April 2020 so are out of date - that is why i am looking elsewhere

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By I'msorryIhaven'taclue
01st Feb 2023 14:07

I mixed together the ever-so-slightly out of date ACCA templates with the ICAEW's templates, and spiced the concoction with clauses that were missing from both (such as Force Majeure). The references to statutory legislation are a little outdated in the ACCA's LofE templates, as are the refs to EU. However, a later (separate) ACCA template for VAT Services only has most of that updated.

The ACCA templates of what they call a "Letter of Engagement"operate in modular fashion,a little differently to the way you're currently issuing them as one entire document:

Part 1 Covering Letter (or "Engagement Letter") covering the basics. I prepared one each for a Ltd Co/LLP, a partnership, a sole-trader, and a"consumer" ie a tax only individual (which has to contain a cooling-off notice period & cancellation form within);

Part(s) 2 Schedules of Service (so one each for statutory accounts prep, corporation tax, s/e accounts prep, income tax, p/ship a/cs prep, p/ship tax, payroll, CIS, & bookkeeping. So the Part 1 Covering Letter, above, could have one or two or more Schedules of Service attached.

Part 3: Terms & Conditions of Service (bulky static document, that you'd update every few years).

Part 4: Privacy Policy (static, as per Part 3 above).

The (ACCA's) methodology is that initially you issue all 4 parts as a "Letter of Engagement" and, if a client wants to add a service, let's say payroll, you just issue Parts 1 (the Covering Letter) & 2 (the Payroll schedule). Until recently I too used to work like you, issuing a complete full-blown chapter-and-verse LofE if a client added or varied a service; but now I much prefer the ACCA's modular approach.

Thanks (4)
Replying to I'msorryIhaven'taclue:
Part on Dudes
By Partyondudes
02nd Feb 2023 07:43

Thanks for the very detailed reply, your thoughts are most welcome. Maybe i will have to "do the admin" of rehashing the ACCA letters as i have done before but i guess i am "afraid" of duplication as the ACCA letters already being out of date will need to be replaced again soon. I suppose i was hoping there is another provider out there who have an up to date version that i will be confident will be updated.

Thanks (1)
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By Tax Dragon
01st Feb 2023 17:52

If you knock them out when you do your AML admin you'll probably save time (and avoid upsetting your insurers). At the minute it sounds like you do your AML, do the work, then do the LoE. Inefficient and - potentially - costly.

But I'm not a one person band so it's easy for me to preach about stuff I don't have to do. But I do think the standard road map (which incorporates best practice, as well as the law) should work to your advantage. However much ALISK and Catherine disagree. You only need one to go bad (and they can go very bad) and you've more than lost any savings or profit you think you've made by taking a different route.

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By SimonLever
02nd Feb 2023 10:50

2020 Inovation have a tool that produces engagement letters for a number of different types of engagemnet - Forms Letters and Tools. https://www.the2020group.com/product/forms-letters-tools-2022/

Although I am a 2020 Group member I use Ignition as it ties in with my billing.

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Replying to SimonLever:
Part on Dudes
By Partyondudes
02nd Feb 2023 12:55

Thanks Simon - are the 2020 templates user friendly? If yes it may be worth a look - although as you are not using that may indicate possibly not ?

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By SE_Confused
02nd Feb 2023 11:06

Been looking at this a while back and decided to go with AccountancyManager. Not great for practice management but makes issuing and resigning LoEs very easy.
Practice ignotion and GoProposal are overkill and too expensive

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Replying to SE_Confused:
Part on Dudes
By Partyondudes
02nd Feb 2023 12:56

Thanks SE Confused - i did look at AM but (and not sure why) it looks too involved (even if more competively priced than others)

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By Mik3
02nd Feb 2023 11:59

Worth having a look at Oversuite. They are part of GoProposal, but where they used to be an intrinsic add-on/part of the pricing software, the software can now be used separately from it.

Currently, we use it exactly this way, we don't tend to issue many proposals, so any pricing software is cost prohibitive.

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Replying to Mik3:
Part on Dudes
By Partyondudes
02nd Feb 2023 12:59

Thanks Mik3 - just looked at Oversuite and although not the cheapest at £75/mth the fact it is a sage product and guarantees compliance and regular updates that may be a small price to pay - i hadn't heard of Oversuite before

The only downside is that on top of the £130/mth I already pay sage (as 10/15 of my clients insist on using it so have to have the Accounts dataset subscription) i am giving more money to a big corporate ! Needs must - any tips on using would be most welcome

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