CPAs know that generating engagement letter content and tracking approval can become complicated and that complications don’t arise in a predictable way. The complications of engagement letters can come at any time, in any job, but they often arise in places you’d least expect them to. For example, in straightforward engagements with long-term clients—the kind you’re comfortable with because they repeat year after year. Or the kind of engagements where your firm’s Partners and Managers are so focused on helping the client they jump right in, get to work, and postpone the drudgery of “administrative stuff” until the last minute.
What types of complications can arise if you’re not vigilant? A few examples are:
- Expectation gaps
- Missing required returns
- Lack of necessary information to do the full scope of work
- Delayed or missing payment
- Liability lawsuits
Clearly, no one wants any of these complications to arise. While losing a liability lawsuit might be a worst case scenario, you could more easily lose money or a client if you don’t have a clear, client-approved engagement letter to guide your work. Unfortunately, this does involve administrative work, and some careful discussions, planning, and writing to ensure that your engagement letters are clear and specific.
This “administrative stuff” necessary for engagement letters can seem onerous and annoying, but it doesn’t have to be. Generating and tracking engagement letters is a necessity, but it doesn’t have to be a burden for anyone involved.
Not drudgery? How else, you ask, are CPAs supposed to decide whether a barely perceptible change in a client’s business requires additional services to be added to the scope of work? How else are they supposed to decide whether minor organizational changes require reviews and approvals different from last year’s reviews and approval? How else can anyone make sure an engagement letter is fully up to date with your firm’s latest standards and fee structure? How is all that possible without drudgery?
Contact us today and find out how Amelio can help.