Why engagement letters are important and how Ignition can help

Surprisingly, there are still many accountants and bookkeepers that do not understand the need for engagement letters. Aside from assisting with regulatory compliance, they establish a steady, considered line of communication with your clients. Engagement letters have the potential to minimize professional disputes by unpacking the expectations and responsibilities of both parties – outlining potential services, project timeframes and commensurate remuneration agreements.

Beyond setting the rules of play for new clients, an exceptional engagement letter should also be forward thinking. Take the time to distinguish the limits of your service – in other words, what is not included. From this perspective, you can anticipate points of confusion and proactively amend processes wherever necessary.

The more clarity you can provide your clients regarding your services and terms, the stronger your relationship will be. Clarity and transparency are building blocks in the trusted advisor relationship, when they are not present there is always room for doubt and confusion.

For new clients, engagement letters can be used to set the tone for the remainder of the relationship and expedite the onboarding process. Here, the numbers tell us that 86% of people say they’re more likely to stay loyal to a business that invests in the onboarding experience.

This onboarding experience extends from your initial interaction with the client through to proposal and formal engagement, culminating with the collation of initial client data and creation of the first workflow task. This is the first impression that the client will have of the way that you will work with them. It is vital that the process is professional, efficient and elegant

Whilst the engagement is a vital step in onboarding new clients, it is a process that should not be confined to the beginning of a relationship. To continue to build strong and transparent relationships you need to implement a system of regular re-engagement, with most accounting regulators and member bodies advocating for a minimum of annual reengagement.

A regular re-engagement process not only creates an opportunity for you to assess your current services and fees, it is an ideal opportunity to discuss with your clients changes in their business or situation which may require a need for different or additional ongoing services. It’s one more way that you can continue to build your client relationships and at the same time increase your service revenue and manage your scope.

In fact, it is nearly impossible to manage scope and mitigate scope creep if your engagements are not kept up to date and regularly reviewed. Without a process of re-engagement when services and client situations change, your baseline to determine if something is in scope, or out of scope, will be wrong. You will find yourself consistently undertaking work with both parties (yourself and your client) unsure if it is “included” in your current agreement or if there will be an extra cost, and potentially extra responsibilities. Whenever you undertake new work without a signed engagement you not only run the risk of not getting paid for unapproved works, but you create a situation where you and your clients' understanding of services can become misaligned potentially leading to a dispute.

With all that mind, let’s take a look at how Ignition can help you craft the perfect engagement letter and create the ultimate client experience.

How can you use Ignition for engagements?

Collating all the information you require for your engagements might seem a little daunting and admittedly, it might be – unless you’re using Ignition. Our entire platform is designed to meet these obligations as easily as possible. The engagements are automated, services and terms are templated, engagements are electronic and e-signing is quick and hassle free.

Once you’ve used Ignition to integrate an engagement routine into your workflow, the task will feel practically automatic and present professionally. Your clients will be comforted by a seamless experience.

Ignition is here to help

The most successful client relationships are built on trust, open communication, and realistic expectation-setting. Understanding your client's needs, pain points, and objectives is key to determining the solution you can offer.

Further, keeping the feedback loop open indicates your commitment to improve and grow with them. Clients appreciate an openness to feedback and a willingness to learn and improve. Follow the steps mentioned above to build lasting relationships with your clients and to keep your professional services business thriving.

To that end, Ignition helps you create exceptional client experiences and foster win-win relationships. With features that facilitate proposals, billing, and client management, Ignition’s client engagement and commerce platform makes doing business a breeze. Start a free trial today.