Quick answer
An engagement letter for accountants should set out who the client is, the services in and out of scope, both parties' responsibilities, fees and billing, timescales, AML and data protection terms, limitation of liability where used, and how to end the engagement. It should be signed before work starts and updated when scope changes.
Written by Waqas Sagar ACA FCCA, Founder of Accotax and Remindoo · Last updated · 5 min read · Part of Proposals and engagement letters guides
Why the engagement letter matters
An engagement letter for accountants is the written agreement that prevents most fee and scope disputes. Professional bodies expect terms to be agreed in writing before work starts.
It also records who is responsible for what, such as the client's duty to provide complete records.
Common problems
Letters are often out of date, list services the firm no longer provides or miss new ones. Some are never signed. A central template that you review each year avoids most of this.
Building a good letter
Use a schedule for each service so the letter matches what the client buys. Include fees, billing frequency and what happens with extra work.
Add standard terms covering AML duties, data protection, complaints and termination. Your professional body publishes guidance and example wording.
Send it for electronic signature and store the signed copy on the client record.
| Section | Included |
|---|---|
| Parties and entities | ✓ |
| Service schedules | ✓ |
| Responsibilities | ✓ |
| Fees and billing | ✓ |
| AML and data protection | ✓ |
| Complaints and termination | ✓ |
Linking proposals and letters
When the proposal and the letter come from the same service list, the price, scope and signed terms match. That avoids re-typing and mistakes.
How Remindoo solves this
Remindoo builds proposals and engagement documents from your products and services and service templates. Tokens fill in client details, and documents are sent for secure electronic signature.
- Create/Send/Secure Engagement
- Secure Electronic Signature
- Document Builder
- Service Templates
- Tokens
- Products & Services
Frequently asked questions
Is an engagement letter a legal requirement?
Professional bodies such as ICAEW and ACCA require members to agree terms of engagement in writing. The engagement letter is the usual way of doing this and forms the contract with the client.
Do I need a new letter for each service?
Not necessarily. Many firms use one letter with a schedule for each service, updating the schedules when services are added or removed.
When should engagement letters be updated?
When services, fees or relevant rules change, and at a regular review, often annually.
Can engagement letters be signed electronically?
Electronic signatures are widely used for engagement letters in the UK. Check your professional body's guidance for any specific requirements.
