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Engagement Letters for Accountants
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Engagement Letters
provide you with essential protective wording for your practice.
In addition, they allow you the opportunity to market additional
services and ultimately create a stronger relationship with your
clients.
Engagement letters
should be utilized for all services and include:
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Outline scope of
services
-
Clarify all
timelines
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Disclose all fees
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Include services
not provided
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Include mediation
language
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Engagement Letters
are Essential to your Practice
As the title implies,
you should truly consider engagement letters essential to every
service that you provide. This is regardless of the extent
of the service, or the length of time that you have known the
client.
Protective wording
A good percentage of
professional liability claims arise because the client assumed
that the accountant was providing a greater breadth of services
than they were actually engaged to. A thorough engagement
letter can be the basis of defense in responding to such an
allegation. This is also why engagement letters should not
only include those services that you have been engaged for, but
outline those services that you are specifically not providing.
Marketing
In defining what
services you are not providing, you open the door to suggest
further services that you can provide your client. While
protecting yourself, you are effectively marketing your
services.
Satisfied Clients
Many Accountants fear
using engagement letters will alienate long-standing clients, or
are over complicated for simple engagements. In reality,
clients will be most satisfied when their expectations are based
on a clear understanding of the services they are receiving.
Mediation
Finally, each of your
engagement letters should include a mediation clause. This
will mitigate the potential severity of any claims that do arise
and can be effective in maintaining client relationships when
unfortunate scenarios do arise.
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