Client onboarding process is a critical phase for any professional services firm. It’s where first impressions are made, expectations are set, and the foundation for a long-term relationship is established. According to a report by Ever After, 69% of companies believe that the success of client onboarding impacts retention. A key element of successful onboarding is the engagement letter, which outlines the scope of work, responsibilities, and fee structure. Automating the engagement letters process can significantly streamline client onboarding, offering numerous benefits for both the firm and the client.
What is an engagement letter?
An engagement letter is a legally binding document that defines the business relationship between a client and a professional firm. It serves as a clear agreement, setting expectations and protecting both parties by outlining the services provided and how they will be delivered, including each party’s responsibilities and fee structure.
The traditional engagement letter process: A challenge to onboarding
Traditionally, creating and managing engagement letters has been a manual process. This often involves setting up an onboarding workflow plan, scheduling tasks, gathering data, and ensuring everything is in order, which can take hours, if not days. The traditional engagement letter process can also involve:
- Searching for the right templates
- Looking up engagement information
- Composing the letters
- Routing them through a difficult review process
- Sending them out for signature and, eventually
- Waiting for the client to sign and return the document
How automated engagement letters transform automated client onboarding
The shift from manual to automated engagement letters brings a multitude of benefits including paperless client, the benefits can significantly enhance a firm’s business operations, from increased efficiency and productivity to consistency and enhanced data security. Automating engagement letters helps free team members to focus on more strategic activities, translating to faster delivery and precision. This automation can be done using client onboarding software. But how exactly can automation help? Let’s dive into the specific areas where automating the engagement letter process can make a significant impact on the client onboarding automation experience.
Template reuse and reduction of manual work
One of the most time-consuming tasks in client onboarding is setting up the initial project plan. By automating the creation of your engagement letter using a template, and reusing parts of templates, you can save a considerable amount of time. Creating a standardized onboarding project plan template that includes all the key tasks, milestones, and deadlines required for a successful onboarding process will also ensure that all the necessary steps are covered.
Faster turnaround and resource allocation
A primary benefit of automating engagement letters is the enhanced speed of document creation and approval, allowing clients to start realizing value from your services sooner. This quicker time-to-value enhances client satisfaction and sets the stage for a strong, positive relationship from the outset. It will also help you to improve client communication.
Automation tools, such as Birdview PSA, can ensure that the right people are assigned to the right tasks by considering factors like availability, skill set, and experience. This not only helps to optimize resource allocation but also prevents burnout and ensures that clients receive the best possible service.
More effective communication and collaboration
As Slack found in 2022, teams utilizing their platform reported a 25% improvement in collaboration and a 32% reduction in email volume, illustrating the power of effective communication tools. Automated tools can ensure that all team members have access to the latest information, reducing the chances of miscommunication or duplicated efforts. A client portal further streamlines client interaction and project review.
Consistent and reliable processes
A significant benefit of automation is the consistency it brings to the engagement letter process. By standardizing key tasks and workflows, you ensure that every client receives the same high-quality experience. You can create a standardized onboarding project plan template that includes all the key tasks, milestones, and deadlines required for a successful onboarding process, and ensure that every client follows a consistent onboarding process. This consistency not only improves client satisfaction but also makes it easier to identify and address any issues that arise during the onboarding process.
Enhanced data security and compliance
In industries where client data security and regulatory compliance are paramount, automation can help ensure that your onboarding process meets the necessary standards. Automated systems can enforce security protocols, such as data encryption and access controls, reducing the risk of data breaches, and help ensure that your onboarding process complies with relevant regulations by standardizing data collection, storage, and handling procedures.
Engagement letter templates
Below you can find different engagement letter templates, which can be used to create engagement letters acca. Explore below.
1. General accounting services engagement letter
Scope of services
We will provide the following accounting solutions:
- Bookkeeping and financial statement preparation
- Payroll processing
- Accounts payable and receivable management
- General ledger maintenance
Fees and payment terms
Our fees for these services will be billed at [hourly rate/fixed fee] and are payable within [payment terms]. Any additional services requested will be subject to a separate agreement.
Client responsibilities
You are responsible for providing complete and accurate financial information in a timely manner.
Confidentiality and limitation of liability
All client information will be kept confidential. However, we cannot guarantee protection from legal disclosure if required by law.
Acknowledgment and agreement
Please sign and return a copy of this letter to confirm your acceptance of the terms outlined above. If you have any questions, please contact us.
Sincerely,
[Your Name]
[Your Title]
[Accounting Firm Name]
Acknowledgment and acceptance:
I have read and agree to the terms of this engagement letter.
Client Name: ______________________
Signature: ________________________
Date: ____________________________
2. Tax preparation engagement letter
Scope of services
We will prepare your [year] federal and state income tax returns based on information provided by you. We will not audit or verify the data supplied, and our work does not include tax planning unless separately agreed upon.
Fees and payment terms
Our fees will be based on the complexity of your return and the time required to complete it. Payment is due upon completion of the tax return.
Client responsibilities
You agree to provide all relevant tax documents and information necessary for accurate filing. Any omissions or incorrect information provided by you may affect the outcome.
Confidentiality and limitation of liability
We will maintain the confidentiality of your records but are not liable for any errors resulting from incomplete or inaccurate information provided.
Acknowledgment and agreement
Please sign and return a copy of this letter to confirm your acceptance of the terms outlined above. If you have any questions, please contact us.
Sincerely,
[Your Name]
[Your Title]
[Accounting Firm Name]
Acknowledgment and acceptance:
I have read and agree to the terms of this engagement letter.
Client Name: ______________________
Signature: ________________________
Date: ____________________________
3. Audit engagement letter
Scope of services
We will conduct an audit of [Company Name]’s financial statements for the fiscal year ending [Date]. Our audit will be performed in accordance with generally accepted auditing standards (GAAS) and will include:
- Examination of financial records
- Testing of internal controls
- Issuance of an independent audit report
Fees and payment terms
Our estimated fees for the audit are [$Amount], subject to adjustments based on additional work required. Fees are payable in installments as agreed.
Client responsibilities
You are responsible for preparing financial records and making personnel available for inquiries.
Confidentiality and limitation of liability
While we will conduct our audit with due diligence, our engagement does not guarantee the detection of all fraud or errors.
Acknowledgment and agreement
Please sign and return a copy of this letter to confirm your acceptance of the terms outlined above. If you have any questions, please contact us.
Sincerely,
[Your Name]
[Your Title]
[Accounting Firm Name]
Acknowledgment and acceptance:
I have read and agree to the terms of this engagement letter.
Client Name: ______________________
Signature: ________________________
Date: ____________________________
Conclusion
Automating the engagement letter process transforms client onboarding. Automation brings with it: an easier, faster, and more consistent onboarding process; enhanced team work; streamlined document creation; better data protection and compliance; and a more engaged and satisfied clientele. By automating repetitive tasks and ensuring consistency across the board, it reduces the burden on your team and provides a smoother, more reliable experience for your clients. Implementing an automated engagement letter system can significantly enhance the client experience and give your firm a competitive edge.
Parul is a dedicated writer and expert in the accounting industry, known for her insightful and well researched content. Her writing covers a wide range of topics, including tax regulations, financial reporting standards, and best practices for compliance. She is committed to producing content that not only informs but also empowers readers to make informed decisions.