Engagement letter software for accountants

An engagement letter is the document that decides how the year goes. Not the boilerplate half, which your professional body's template already handles, but the fee schedule: the fixed fee for the work in scope, how it is paid, what is due on signing, what happens when the client asks for something outside the scope, and what a late payment costs. Those five figures are what people argue about in March, and they are the ones most letters state vaguely. This worksheet works them out from your own numbers so the letter can name them exactly: the instalment, the deposit, the out of scope rate applied to the hours you actually expect, the expected total for the year, and the late fee on one overdue instalment.

The fee, and how it is actually paid

An $8,200 annual fee over twelve instalments is $683.33 each, with $820 due on signing at a 10% deposit. Those three numbers are what a client remembers from the letter, and a letter that names them exactly is a letter nobody has to interpret in month seven.

Out of scope work, priced before it happens

Naming the out of scope rate is what stops the argument; seeing what it comes to is what makes you name it. Three expected extra hours at $145 is $435, so an $8,200 engagement is really an $8,635 year. If that number surprises you now, it will surprise the client more in March.

What being late costs, stated rather than implied

A late fee of 8% a year on a $683.33 instalment thirty days overdue is $4.49. Small, and that is worth knowing: the value of the clause is that it exists and is named, not that it funds anything. Whether you can charge it, and whether you want to, is between you and your advisers.