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How often do you renew engagement letters?

How often do you renew engagement letters?

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Hello

We do payroll for companies and wondering how often our engagement letters should be renewed? 

There are changes every 12 months but this would only be small pricing amendments.

We are either thinking to renew every two years once the client joins us regardless if there are changes or not but unsure of whether we should renew every time there is a change, however, this would be a lot more work and also the clients may not like new engagement letters every 12 months or so.

Thoughts?

Thanks in advance

 

Replies (9)

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Bramble
By Chris.Mann
07th Dec 2019 22:39
Thanks (1)
RLI
By lionofludesch
08th Dec 2019 10:45

Clients hate engagement letters.

Let's not mince words.

Thanks (3)
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By JDBENJAMIN
08th Dec 2019 15:04

I only renew a particular client's engagement letter if there is some major change needed. Otherwise they stay in place for the life of the client. I've got live ones from twenty years ago.

Thanks (4)
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By Bob Loblaw
10th Dec 2019 15:51

Every 3 years. If the fees are reviewed and need to be adjusted within that cycle, we'll just send out a brief letter as a follow up for their agreement.

Thanks (0)
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By pauljohnston
17th Dec 2019 10:07

If you use practice ignition then each time to advise of a fee price change the client gets a new engagement letter.

With all the changes GDPR AML etc we send out a proposal each year with the new /amended enagagement letter

Thanks (1)
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By Marlinman
17th Dec 2019 12:38

Engagement letters may be appropriate for the bigger firms who are always getting into fee disputes and being sued. However for the sole practitioner I think they are a complete waste of time
They just get filed away and forgotten about and in over 25 years in practice I have never had to refer back to one. Clients hate them and view them with suspicion and for the practitioner it's just more unpaid work forced on him.

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Replying to Marlinman:
RLI
By lionofludesch
17th Dec 2019 12:42

Marlinman wrote:

Engagement letters may be appropriate for the bigger firms who are always getting into fee disputes and being sued. However for the sole practitioner I think they are a complete waste of time
They just get filed away and forgotten about and in over 25 years in practice I have never had to refer back to one. Clients hate them and view them with suspicion and for the practitioner it's just more unpaid work forced on him.

I would echo that.

Do a decent job and you won't need an engagement letter.

Thanks (2)
By buttercup books
17th Dec 2019 23:08

I agree, clients hate letters of engagement and view them with suspicion, but don't all professional bodies mandate letters of engagement, AAT certainly does

Yes, they're hugely time consuming and a waste of time,

I think they come under the classification of "necessary evils" along with MTD, GDPR and AE - and..... HMRC

Thanks (1)
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By djokhoo
18th Dec 2019 18:56

Dear Ms/Mr.
Engagement letters are a contract for services between the client and yourself.
It sets out the conditions that both parties must adhere to. It is good to have in the event that there is a disagreement with the client or court matters or reviews by your supervisory body.
I think every there years is safe as a reminder to the client what services your are offering and the limit of such services.
in the event of a major change - you will need to revise the contract. In the event of a minor change - you will need to include a clause in your engagement letter for such changes - that way you will not need to change the letter until required.
For now you can just add a note to the engagement letter with confirmation by the client (signature or initials or emai) as to the adjustement on fees.
Hope this helps,
Good luck

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