It's been a while since I worked in an accountancy practice, so my knowledge of the various letters is a bit rusty.
Would any of you experienced bookkeepers mind sharing your letter of engagement with me? I'm also mindful that I will need to write to existing accountants and request clearance to act, so a copy of that letter would be good too.
If there are any other routine letters that I need to be aware of, copies would be most appreciated. My first few clients have materialised far quicker than I expected and I'm not quite prepared...
I was wondering of I could jump on the bandwagon too and see if I could get copies too. I've read through the one in the members only area, but I like to see different types then take snippets and adapt. All the work I've done so far has been out-sourcing work for an accountancy firm, so I signed an agreement provided by them rather than doing my own letter of engagement. With all the networking i have planned though, i am hoping my first proper client is only just around the corner. Also I am registered with HMRC for MLR so have no idea what I am meant to provide my client with, with regards to that aspect.
Good luck with the professional clearance letters. These have been a tremendous pain for us this year. Almost all of the requests we have made have come back incomplete (and a fair few have thrown up mistakes, which is probably why the client is moving). There are a few accountants out there who take it personally when a client leaves, they should just provide the info and move on.
Incidentally, with the letters of engagement, if you act for limited companies, you should have a clause which says that in the event of a company defaulting, the responsibility for the debt passes to the directors. Hopefully, you should never need it, but it's better to have it in than not.
I never got anything from my last clearance letter for months, then a copy of the clients last self assessment arrived in a brown envelope with no explanation, no compliment slip, in fact nothing to say who it was from.
Not at all what was asked for, but all I got.
Kris
-- Edited by kjmcculloch83 on Thursday 1st of December 2011 02:58:01 PM
with the letters of engagement, if you act for limited companies, you should have a clause which says that in the event of a company defaulting, the responsibility for the debt passes to the directors.
Nice line Nick.
I'm going to update my Engagement letter to slip words to that effect in.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
So how have you added about MLR in your letters of engagement - I think that's what I'm struggling with - the wording (I'm a number person that's why I'm a bookkeeper - words fail me!). The sample letter on the members area doesn't seem to have anything.
I don't put anything about MLR in the letter of engagement. I tried to keep the letter itself as simple as possible. I do have a bit in my new client information pack. It reads:
In order to help stop criminals from using financial services for illegal activity, KM Bookkeeping Services complies with Money Laundering Regulations. We also do our best to protect you and your money from fraud and identity theft which can happen without your knowledge. Criminals need to distance the money they earn from illegal activity, sometimes by trying to set up an account using a false name and address or even by asking YOU to put money into YOUR accounts on their behalf! KM Bookkeeping Services will try to prevent this from happening. Under certain laws, we may be obliged to disclose information about our clients. For example, if benefit fraud is suspected we may be required to give information to Investigators. Also, HMRC has the power to audit our clients accounts.
New Clients
You will be asked to provide government issued ID (where possible) and for proof of your address. This information will help us prevent anyone else from falsely using your details.
Personal details required: Your name and address (with proof) Your date of birth Your nationality (with proof of right to stay in the UK)
Why do we need to see proof?
These checks are a legal requirement, and unless you can provide enough evidence of your identity then we are not allowed to offer you any bookkeeping services. Remember it is for your own protection.
What proof do we need to see?
We need to see two separate original documents. The same document cannot be used as proof for both identity and address.
To prove WHO you are
UK or EU Passport current & signed Passport Non UK or EU: with at least 6 months time remaining together with a current visa which should be indefinite or long stay Old style FULL driving licence provisional is not acceptable Current UK or EEA photo card driving licence (full or provisional) Current shotgun or firearms certificate Current EEA Member State Identity Card Current residence permit (issued by the Home Office to EU Nationals)
To prove WHERE you LIVE
Old style FULL driving licence (If less than 10 years old) Current UK or EEA photo card driving licence (full or provisional) if less than 10 years old Bank or mortgage statement (from the last 3 months) Current Council Tax Bill Inland Revenue Correspondence (must show your name and current address) Current Local Authority rent card or tenancy agreement Recent utility bill: o Telephone cable or BT (or other landline) NOT mobile o Current benefits book or original notification letter that confirms your right to benefits or State Pension
mines a lot shorter than yours as to requirements as I imply required documents rather than state them in the letter. (the engagement letter already runs to five pages anyway! Seven with attachments).
My money laundering paragraph read (with some bits X'd out to publish on here) :
MONEY LAUNDERING XXXXXXXXXXXXXXXXXXX is regulated by Her Majesties Customs and Excise to exercise anti money laundering procedures (MLR registration number XXXXXXXX). Initially this will involve performance of customer due diligence to ensure that clients are in fact who they say they are and that they are entitled to represent the business. Acceptable forms of documentation such as (but not restricted to) passports and utility bills will be required as initial evidence. Per requirements of the Money Laundering regulations 2007 ongoing review of the legality of client business affairs will be performed throughout the engagement and infringements will be subject to reporting to the Serious Organised Crime Authority (SOCA).
On other issues a few paragraphs worth ensuring that you have equivalents of :
PERIOD OF ENGAGEMENT This engagement will come into effect on the date signed and continue in force indefinitely, unless and until terminated. Where alterations are made to the terms of the engagement a new engagement letter will be issued to supersede all previous engagement letters.
FORCE MAJEURE EVENTS This means an event, or a series of related events, that is outside the reasonable control of the parties affected. Including, but not restricted to hacker attacks, viruses and other malicious software attacks and infections, problems with the internet or a part of the internet, power failures, industrial disputes affecting any third party, changes to the law, disasters, explosions, fires, floods, riots, terrorist attacks and wars.
APPLICABLE LAW This engagement letter is governed by, and construed in accordance with, English & Welsh law. The Courts of England & Wales will have exclusive jurisdiction in relation to any claim, dispute or difference concerning this engagement letter and any matter arising from it. Each party irrevocably waives any right it may have to object to any action being brought in those courts, to claim that the action has been brought in an inappropriate forum, or to claim that those courts do not have jurisdiction. All work performed is conducted using the current legislation according to the accounting period. We cannot be held responsible for future development and changes in the legislation.
LIMIT OF LIABILITY You agree that XXXXXXXXXXXXXXXXXXXXXXXXXXXXXX Services liability hereunder for damages, regardless of the form of action, shall not exceed the total amount paid for the services described herein. This shall be your exclusive remedy. You further agree that XXXXXXXXXXXXXXXXXXXXXXXXXX will not be liable for any lost profits, or for any claim or demand against you by any other party. In no event will XXXXXXXXXXXXXXXXXXXXXXXX be liable for incidental or consequential damages even if we have been advised of the possibility of such damages. Either party may bring no action, regardless of form, arising out of the services under this agreement, more than one year after the date of the last services provided under this agreement.
COMPLETE AGREEMENT This letter and the Book-keeping Services Form comprise the complete and exclusive statement of the agreement between the parties, superseding all proposals oral or written and all other communications between the parties. If any provision of this letter is determined to be unenforceable, all other provisions shall remain in force. If you have any questions or concerns regarding this engagement letter or desired services please contact us at the above address.
As mentioned, the above are just excerts and should not be used by anyone out of the context of the rest of my engagement letter (which is purely for my companies use). However, the titles should give indication of some things that others may wish to include in their engagement letters.
The BKN members area has an engagement letter that members are free to use. It didn't suit my purposes but I have borrowed some chunks from it as well as engagement letters that I've had in the past and several other sources to create mine.
HTH,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I thought a few of those sections looked familiar Shaun. I have similar in my letter lifted from the training pack. I have the limited liability clause, but after doing a module of my HNC on Scots Business Law, I'm beginning to wonder whether it would ever hold up if things were to get as far as court. Though I guess that's why I pay insurance.
The MLR Stuff is really helpful - I'm going to use the BKN letter of engagement but adapt it slightly for myself and add a MLR paragraph. I'm sure the longer I am in business the more I will change and adapt.
Our standard LOE is 6 pages. The headings (for a sole trader) are as follows:
1. INTRODUCTION 2 PERIOD OF ENGAGEMENT
SCOPE
3. OUR SERVICE TO YOU 4. YOUR RESPONSIBILITIES: PROVISION OF INFORMATION BY YOU 5. OTHER SERVICES AND GENERAL TAX ADVICE 6. INVESTMENT ADVICE 7. EXCLUDED SERVICES
TERMS
8. PROFESSIONAL RULES AND PRACTICE GUIDELINES 9. COMMISSIONS OR OTHER BENEFITS 10. CLIENT MONIES 11. RETENTION OF RECORDS 12. REGULATORY REQUIREMENTS 13. QUALITY OF SERVICE 14. FEES 15. LIMITATION OF LIABILITY 16. ELECTRONIC COMMUNICATION 17. APPLICABLE LAW 18. DATA PROTECTION ACT 1998 19. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 20. CONFIDENTIALITY 21. CONTINUITY OF SERVICE 22. AGREEMENT OF TERMS
We have 4 standard templates, for sole traders, partnerships, ltd co's and directors. The whole LOE is generic apart from the first page (which has client's name and address and starts Dear Mr. Smith), to try and make the process as easy as possible.
mine is a heading section detailing the client including a responsible contact person and full business address then :
1) PERIOD OF ENGAGEMENT 2) CLIENT OBLIGATIONS 3) WORK TO BE PERFORMED a) Scope of Limitations b) Agreed Upon Services 4) FEE SCHEDULE a) Professional Fee's b) Factors affecting Your Professional Fee c) Direct Expenses d) Timing of Fees 5) SUBCONTRACTING OF WORK 6) FORCE MAJEURE EVENTS 7) SUSPENSION OF SERVICE 8) TERMINATION OF SERVICE 9) MONEY LAUNDERING 10) APPLICABLE LAW 11) CONFIDENTIALITY 12) LIMITATION OF LIABILITY 13) CONTINUITY OF SERVICE 14) COMPLETE AGREEMENT
In addition to the above there is also an appendix running to two pages detailing the services that have been agreed to for the particular client
Not too disimilar to yours it would seem Nick. Although some of your heading are subsumed under other headings in mine. (Such as mention of specific laws and regulations coming under my applicable law paragraph).
Talk later, got to do the school run now,
all the best,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Think that ours started from the same initial source Kris which would explain the similarity in the headings.
As usual though I then went off and created my own hybrid out of engagement letters that I've accumulated in my time plus (I think) there may have been a smattering of the ACCA and AAT one's in there somewhere.
When I'm finally fully ACCA I'll take their engagement letter but until then this hybrid seems to say everything that I want it to.
Anyway, that's basically why I won't post the whole thing on here s it was built by me, for me and may have holes in it that I would hate for someone else to inherit from me by copying my engagement letter.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Most probably Shaun. I have butchered a few along the way. I'm the same as you on this one, I'll happily share anything else, but I'm a bit more reluctant to share my letter of engagement for some of the reasons you mention.
Kris
-- Edited by kjmcculloch83 on Friday 2nd of December 2011 10:19:13 PM
Ive included as many additional sections as possible now - originally based on the AAT letter of engagement however I found over years best to have as much as possible confirmed in writing prior to work. I have included: Registered with MLR Registered with Data Protection Act The Personal Agreement for Ltd/LLP " In the event that the company is unable to meet its liability in respect of our outstanding fees as and when they fall due then the companys directors would be personally, jointly and severally liable in respect of our outstanding fees. " Confirmation of Insurance Liability Cover Complaints Procedure Data Errors & Liability Proof of ID - Ive also asked for copy company letter head
Think to some degree the Letter of Engagement confirms they still have a responsibility when they pass work to you and also you are professional - it sets your company apart from others that do not have insurance cover and may not be registered with Data Protection.
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Donna Curling - Complete Book-Keeping Ltd (CBKLtd) - 07939 101900
