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Practice Tip - Standard Letters

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21st Nov 2005
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There's been a lot of talk about "commoditisation" of accountancy services on this site, and others, of late. Like it or not, the realisation is increasing that a lot of what accountants do is really quite standard, quite a lot of the time. And the accountant who does not have a cost structure that reflects that fact is going to lose out in the long term (which in this case might not be that far away).

I will admit I realised this a long time ago. I'm not claiming any clairvoyance, I was simply aware I could make my life easier and increase my income at the same time if many of the routine tasks I undertook were standardised. One of the first I tackled was producing standard letters.

I happen to think it is an accountant's duty to communicate, and to have a record that they have done so. Of course a phone call qualifies as communication, but a record of any call takes as long to write as the call in many cases so I have always been, and remain, a fan of the letter as a means of communication. Admittedly, these days about 97% of all those I send go as email attachments (with the client's consent - which is a standard clause in my engagement letter to which no one has ever objected). I also have standard email texts as well for use on occasion.

What do these things cover? Take the following list for which I have templates:

1. New client letter;
2. Engagement letter;
3. Fee note;
4. Fee note covering letter;
5. Polite first reminder for outstanding fee;
6. Further, less polite reminders;
7. Thanks for your cheque (usually sent as an email);
8. Registration of business forms covering letter;
9. VAT registration form covering letter;
10. Mortgage reference request;
11. Request for tax return information;
12; Tax return queries letter;
13. Sending tax return to client covering letter including schedule of tax due and note on the risk of Revenue enquiry and the need to retain records;
14; Tax return submission letter (not much use now in the event of electronic lodgement, but lamented)
15. Advise client that Revenue calculations agree and remind them of sums due;
16. Request for accounts information;
17. Accounts query letter:
18. Send draft accounts to client:
19; Submission of accounts to Registrar of Companies:
20. Submit corporation tax return;
21. Annual return letter to client:
22. Submit annual return to Registrar of Companies;
23. Consultancy letter (yes, even they have a standard format to ensure issues are covered consistently and in a logical order).

And on, and on. That's just a taster.

If the standard letter is linked to a database of client names and addresses, easily accessed by the software itself, the time spent in letter production is massively reduced. It really becomes a process of "filling in the gaps".

There's a real plus in that approach whether you're single handed (after all, how good a typist are you really?) or have staff. In fact, the latter case really proves the point, because teaching people to write good letters takes years. And to remind them of all the risk warnings and other issues that have to be covered takes longer in some cases. If these are all in the standard text you know you have covered your risk on these issues and can concentrate your review of what they have written in those gaps - the bits which make the letter personal to the client.

Much of the work of an accountant can be commoditised - but I suspect no area can be more quickly commoditised with greater benefit than the letters you send.

Richard Murphy
AccountingWEB contributing editor Richard Murphy is a sole practitioner chartered accountant but was previously senior partner of a firm for 11 years. He has also been chairman, chief executive or finance director of 10 SMEs. A collection of previous articles by Richard on practice management themes is available in Practice Management Zone

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Richard Murphy
By Richard Murphy
23rd Nov 2005 22:22

Paul's right - elegance isn;t everything
I always recall that when I trained in tax at what was then Peat Marwick in London we always sent in hand written tax comps. Now I know this is 20+ years ago - but it was still unusual at the time. I admired it though - because it worked, reduced risk in typing (high at the time) and saved cost.

So what's wrong with a tick the box letter in some cases? Nothing. You just have to chose the right case, of course.

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By listerramjet
25th Nov 2005 13:14

go for it
you can take systematisation too far, but standard letters is not too far, and I have seen it work effectively in a number of practices.

Of course there are problems with any system as a firm grows and changes. New people often bring new ideas, and sometimes interpretation of existing ideas change with time. Not to mention that requirement also change with time.

The overhead of systematisation is that you have to have documented procedures, and you have to monitor their use - which is an overhead and can stifle innovation. BUT review the use of the process as part of regular quality control reviews, and introduce periodic internal training sessions where use of the procedures can be demonstrated, reviewed, and challenged.

I love the comments about tick lists and hand written tax returns. One of the problems with automation is that of content over format. I am sure that handwritten accounts would be impractical under the modern reporting requirements, but clients are surely more interested in the answer than the format in which it is provided, and in this automated world I think this is often overlooked.

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By AnonymousUser
23rd Nov 2005 14:44

Agree

When I first started out as a sole practitioner I took this approach and it worked. I even went a stage further with a photocopied tick-the-box letter for sending things to IR/Companies House etc - it had a list of 10 or 12 typical things you may say in a letter, eg "heres the accounts + computations" (this was before SA/CTSA), "heres a cheque want a receipt", etc, etc - and they just got the letter, the clients name written in by hand and a tick box. Not elegant but efficient.

As my practice has grown I've found the efficiencies have slipped, and with 20 staff its easy to become "flabby" on such things - at that stage you need to go back to roots - how did you do it when it was just you - and teach others the lessons.

 

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By Esther Sheppard
11th Jun 2014 15:18

Standard take over letter

Hi everyone

Was just wondering whether anybody knows where I could get a template for a standard take over letter for accountants?

I have been working with a bookkeeper for a year and am now taking on some of his clients.  As I am a qualified AAT Accounting Technician I can obviously offer accountancy work, too, and I need a standard letter for taking over clients from another accountant.

Can anyone help, please?

Esther

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By alihassan
26th May 2016 14:26

does anyone know where I can find those template.

thank you

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