Unfortunately, many accountants see engagement letters as a waste of time or just an extra step in their current process. However, as Sarah Beckett Ferenece perfectly puts it in her article, “Just as a seat belt helps mitigate the risk of bodily injury, using a well-crafted engagement letter may help mitigate the risk of a professional liability claim.”
Yes, the Engagement Letter defines the legal relationship between a professional firm and its client(s), but when well-crafted, an engagement letter is more than just a contract.
When a firm no longer sees an engagement letter as something that needs to get done, and instead, takes the time to build out their letter to fully reflect the value and service that they provide, the Engagement letter reaches beyond serving as document to mitigate risk. It becomes an additional business tool that:
- Sets out the proper expectations to your client and of your staff.
- Serves as a clear, precise and agreed upon road map so your client understands what services will be provided.
- Allows your firm the opportunity to thank your client for the opportunity to work together, demonstrating professionalism and the desire for a long-term business relationship.
- Serves as a reminder as to what was discussed and a confirmation that all parties involved are on the same page.
- Accurately and succinctly sets forth your payment fees, terms and schedule, avoiding any concerns down the road as to when and why money is to be collected.
So take the time and give your Engagement Letters the effort and attention they need. In the end, your clients will thank you!