Engagement letter
also known as letter of engagement
A letter that sets out what a firm will do for a client, what it won't do, who is responsible for what, and how fees work - signed before the work starts. Accounting and law firms are often expected to use one by their professional bodies.
For example, an accounting firm taking on a new bookkeeping client sends an engagement letter covering the monthly bookkeeping, the year-end accounts, the fixed monthly fee, what the client must provide each month and what counts as extra work. The client signs it before the first month's books are touched.
Why it matters to your firm: it is the scope of work, the fee agreement and the protection in one document. Sending, chasing and filing them by hand eats hours every onboarding season - which makes them a common first thing to automate. Start with an ops audit to see how much time yours take.