Engagement Letter Amendment

[Uncle Sam]

I have started preparing and have clients sign engagement letters even for write-up work.

So far I haven't met any resistance or problems.

However, I've got one who would like me to add two provisions.

What's done now is - client sends me a Quicken write up on a monthly basis
I take the data and reenter it into Quickbooks and prepare a monthly P&L printout as has been requested with a comparative to same month in prior year (why they don't want cumulative amount, I don't know). And prepare the bank rec. Client NEVER maintains a G/L balance, and doesn't wish to. Does electronic banking and whatever bank winds up with is what is used for the ending balance. (I know it's wrong - but can't change this one).
I also prepare the bi-weekly payroll calculations for the employees who are on an hourly basis.

Client would like me to modify the bookkeeping engagement letter to provide two additional items
1. The financial records and Quickbook registry (up to date general ledger) are properties of the corporation and will be furnished upon request by President of the corporation without charge.


2. Also, please add - will provide expense reports sorted by category for auditing purposes upon request without charge.


I can understand # 1 and have no problem with including it- Q/B data is the client's even though stored on my computer.

But can't figure out what #2 is - I provide a P & L printout already monthly. Assuming I get an explanation from the client as to what that is - is it acceptable to put both provisions in a revised Engagement Letter?

[taxmandan]

The "upon request without charge" wouldn't happen with me. If they want more work they pay more fees, at my standard rate. Otherwise, he'll be calling twice a week asking for an updated copy and you'll be spending way too much time printing and delivering stuff for free. I wouldn't have a problem incorporating those changes, give them what they want even if it repeats something they already get.

Daniel

[erchess]

But can't figure out what #2 is - I provide a P & L printout already monthly. Assuming I get an explanation from the client as to what that is - is it acceptable to put both provisions in a revised Engagement Letter?[/QUOTE]

I think what he means is that if he gets audited he wants you to give him a report on his expenses sorted by category for each year that is being examined.

I agree with taxmandan- no additional output from the professional without additional payment.

[MAJ]

Ahh.. Engagement - what a wonderful time.....

If you are to modify your standard engagement letter that's fine. But it needs to be reviewed (like you are doing now) This takes time, time is billable. The end result should be something you both agree upon as well as protects both parties from abuse.

The amended engagement letter should come with a fee. If the client had requested copies of data in the past and you failed to comply I would understand his position. Howver, if you've always provided information as requested I do not understand his postiion. There's usuually a motive behind any new action. Try to figure that one out.

How long have they been a client?