get paid and avoid misunderstandings with your clients. by steve erickson in some firms, engagement letters are treated as an afterthought even though they are required as a part of any quality control system. this lack of attention to the detailed management of an engagement often leads to misunderstandings, scope creep, upset clients and increased write-downs. here are a few thoughts on how you might improve this process:
1. have a face to face meeting with your client to discuss the terms of the engagement and to go through the engagement letter.
2. have your client initial important clauses to make sure they understand their responsibilities to ensure the engagement is completed efficiently and on time.
3. include wording that a change order will be required should the scope of the work change during the course of the engagement.
4. make sure that a “stop work” clause is included that tells the client that all work will cease if the payment terms are not followed.
include the following schedules as an attachment to your engagement letter:
5. a description of examples of work that is in the scope of the audit or review and examples of work that is outside the scope of the engagement. you need to educate your client about these matters.
6. a sample change order that will be issued should the scope of the engagement change.
7. a copy of your firm credit policy.
please give this some thought and then act to improve your engagement management through managing your clients’ expectations. just think what your life would be like if you could capture a significant percentage of your write-downs. you might even be able to work less and make more.