An engagement letter defines the legal relationship (or engagement) between a professional firm (e.g., law, investment banking, consulting, advisory or accountancy firm) and its client(s).
This letter states the terms and conditions of the engagement, principally addressing the scope of the engagement and the terms of compensation for the firm. The example given below refers to the engagement of an accountancy firm.
This is a service we use to educate them about their current bookkeeping practices and to highlight issues and concerns.
If they don’t want to pay for this initial service, they probably wouldn’t be a good fit for us and aren’t likely to see the value in our other services.
Better that you find out at the beginning than once you’re hip-deep in their books.
Follow these steps to write a strong engagement letter.
Provide an introduction by stating that this is an engagement letter and its purpose is to spell out the agreement between you and your client.
This is also where we let the client know how much it will cost for us to fix their books and our fees for ongoing services. We want to be paid fairly for our time, our resources and the years of experience we bring to this service – which is why we always charge for it.
You’ll have prospective clients who won’t want to pay for the Quick Review, and that’s fine.
The Quick Review starts with a detailed analysis of the client’s Quick Books® file and looks at all aspects of their business, from company setup to bank reconciliations, accounts payable and sales tax.
We also make sure they’re using the latest version of Quick Books and that everything is set up and working properly.
The prospective client knows that there’s probably something wrong with their bookkeeping, but since they’re focused on their business, they have neither the time nor the knowledge to figure it out.