3 Reasons Engagement Letters Are Important To Your Follow

3 Reasons Engagement Letters Are Important To Your Follow

Engagement letters are the foundation of the authorized relationship between tax professionals and their clients. They are letters that, once signed by both you and your consumer, represent a legally binding contract between you (or your apply) and the client. As such, every time you tackle a new consumer, that relationship should start with an engagement letter for 3 big reasons…

1. Engagement letters are legally binding.
Having a legally binding document in place from the outset of a case will lend security to both you and the client. Within the (hopefully rare) case that there is a dispute between your practice and a consumer, the free engagement letter letter can function the go-to doc to resolve the dispute.

2. Engagement letters set expectations.
Tax resolution clients going via a tumultuous experience are desperate so that you can supply them some predictability. Clients want to see specific language regarding pricing, the scope of your companies, and the way any changes to the agreement might occur. Understanding what to expect from the outset can provide these shoppers the arrogance they should move forward.

For the tax professional, an engagement letter is the ideal place to spell out any expectations. These could include the necessity of prompt communication, as well as the necessity for the shopper to be diligently compliant with their taxes and forthcoming about all of their funds while their case is open.

3. Engagement letters stop misunderstandings.
Your relationship with the shopper will typically begin with some type of verbal agreement. Chances are you'll not even think of it as an agreement in formal terms, but over the course of a session you say things that the consumer may take as promises or agreements.

Engagement letters take much of the guesswork out of your relationship with the client. After you place an agreement on paper and ask your shopper to read and sign it, no one has to try to keep in mind precisely how much you quoted them in the consultation. The price is within the engagement letter. The client doesn’t have to be stunned when you quote them an additional fee to signify them in an attraction or different additional services. You possibly can merely refer them to the engagement letter (which, of course, has language explaining precisely what service they're paying for).

Even better, if the engagement letter is efficient and clearly worded the probability of these kinds of misunderstandings ever arising is significantly reduced.

Website URL: