Engagement Letter Generation Process

Engagement Letters From Creation To Signature

The engagement letter is the guiding document that details the scope of work, deadlines, internal and external support requirements and fee arrangement. It is the foundation document in the firm / client relationship. Done right, the engagement letter is a crucial risk management tool.

We all know that Engagement Letters are necessary for properly outlining the scope of work, cost, the expectations of your client and your firm, and the time to completion. Unfortunately the actual engagement letter generation process of creating and executing the letter has become a burden for many CPA firms.

History has taught us that tracking engagement letter content and approval can become complicated and complications usually 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.

Fortunately the next advancement to allow your firm to simply your Engagement Letter Generation Process has arrived and can help you with many of your key concerns, including:

  • Simplifying the process to update your EL
  • Handling version control
  • Ensuring that the engagement letter comes back signed and filed away
  • Ending the cycle of beginning the work without having a signed and executed engagement letter
  • Making the overall EL process easy to manage and execute

If you are interested in learning more, please click here or reach out to Randi Kranzler, our Director of Business Development.