We take letters of engagement very seriously. I know we're meant to under ICAEW guidelines, and general common sense as professionals, but we have devoted a lot of effort to make issuing and updating them as easy as possible, and ensuring that they are re-issued regularly.
But reflecting on the entries on last week's timesheet I can't help remarking that most of what I spent doing was not really covered by the standard engagement letter. For example:
Mortgage and letting agency references
New company formation, and the related HMRC registrations
Should we have separate engagement letters for these activities? Or should we include them in the standard letters, just in case? - I hope not, the standard letters are long enough already.
What do you do? Do you issue a simple sort of order confirmation letter when clients ask you to provide this sort of one-off service?
If, like us, you basically don't have any sort of terms of engagement for such services, doesn't that make a bit of a mockery of the main letter? We go to great trouble to issue detailed terms, over some four to six pages, plus standard Ts & Cs, and even that doesn't cover what we spend a lot of our time doing!
I recall 2020 Group produces what it calls an "Invisibles Menu" to cover such services, a good name for something that is all too often taken for granted. That's not a bad idea, after all they tend to be self-contained jobs that can easily be subject to standard fixed fees. What 2020 don't do though is include some standard engagement terms with this menu.
I'd be interested to know what other firms do, but I definitely think it's an area we need to look at and produce some sensible terms so that we and clients understand exactly the scope of these one-off services.
I can tell some readers are not convinced there's a problem here. OK, take company formations. What do you do for clients - do you just fill in the forms or do you offer additional features (either as standard or extras)? How about providing the registered office address - I assume you charge separately for that, but is it a one-off or an annual fee? And if you're the registered office, what happens when you receive post for the company? Do you charge for forwarding it?
Do you also register the new company for PAYE, and for VAT if applicable? Is that included or an extra fee? What responsibility do you take for this?
And how about statutory registers - do you provide them/maintain them/write them up? If so, is that included, or an additional fee - again, one-off or annual?
And so on - most of these simple one-off services could come in a variety of service levels. How do clients know how much your proposing to do (and how much it's going to cost)? A good engagement letter should cover that off - except most of us don't have one!