Practice Development Articles
Engaging Your Clients
Starting with the First Engagement in Setting up a New Client in QuickBooks Financial Software
By: Sandi Smith, CPA
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Note: The author is not rendering legal, accounting, or other professional services in this publication. If legal advice or other expert assistance is required, the services of a competent professional should be sought.
After ten years of being in business for myself, I still get excited when a new client agrees to do business with me. After the exhilaration, however, there is the paperwork. This paperwork describes the new business arrangement and usually takes the form of an engagement letter, which is a legal, binding contract between the two businesses. CPAs have volumes of guidance on this subject, but what if you are not a CPA? Should you insist on an engagement letter? My personal recommendation is an emphatic yes.
Even though you might be anxious to jump in and get started on the new client's project, it is worth your while to sit down for a moment and craft a letter that documents what you will and won't do for the client. Writing the letter helps to focus both you and your client on exactly what will take place during the project. It can clarify oral communications by further defining the scope of the engagement. It can provide a reference to help avoid any misunderstandings halfway through the assignment. It could also potentially provide legal protection in case the relationship goes sour.
An engagement letter should consist of at least the following parts:
Purpose. This brief introductory paragraph states the purpose of the letter, which is to describe the scope and limitations of the services to be provided.
What We'll Do. This section describes in detail the services to be performed and should be customized to the client's specific needs.
What We Won't Do. It's just as important to describe what services won't be provided to the client in this part.
What We Need from You.. Accountants need materials and items from their clients to complete the work, and this paragraph enumerates them.
When We'll Do It. This sentence provides an estimated project schedule.
Hardware and Software Warranties. This area describes exclusions related to hardware and software used or acquired as part of the project.
Services Outside the Scope of this Letter. This section handles additional services that might come up during the engagement.
Fees. Payment amounts and terms are described in detail in this segment.
Approvals. This final portion requests the client's signature as an acknowledgement of the agreement.
Sample Engagement Letter—Setting up a New Client in QuickBooks
To help you create your own engagement letter, a sample letter is provided in Word format. This particular letter is specifically written for services in setting up QuickBooks financial software. Each word or phrase in bold should be replaced with the appropriate phrase that fits the particular client and project that you're writing the letter for.
The section, What We'll Do, should be further customized to fit the client's requirements. For example, if the client has no inventory, you can delete references to recording inventory. The letter should be provided on the accountant's letterhead, signed and presented to the client for signature.
You should always check with your own attorney before creating or signing any business contracts. I recommend all practitioners, especially if they are not CPAs, to consider asking their attorney for their opinion of engagement letters when starting a relationship with a new client.
- Sample Engagement Letter — QuickBooks Setup
Word file (16k)
Sandi Smith, CPA, has authored three books, over 100 technology articles, and dozens of CPE courses for the accounting profession. She is a Dallas-based freelance writer and Web designer and can be reached at sandi@sandismith.com.
Last Updated: 07/03/2003
