The company has set limits on the work that should be done. The goal is to prevent “Scope Creep” from entering, which all tax advisors and lawyers fear. The letter may also cite services that are outside the current agreement, but can be added if necessary, with an estimate of the cost of these supplements. Indicate when the interaction begins and ends. They may also include expected delivery dates if a specific delivery item (z.B. an audit) is available. Engagement letters generally contain a termination clause allowing one of the two parties to opt out of the agreement, with certain applicable conditions varying from letter to letter. One of the opportunities for improvement we have encountered is to decide whether we can combine the VPA with the letter of commitment. Have you discovered this topic during one of your seminars, conferences or discussions with other accountants who have read your books and moved to FPAs? Each engagement letter begins with the indication of the contracting parties.
One party is the professional services company that provides its services and the other part is the customer who receives the services. This commitment begins on February 1, 2018 and is valid until February 1, 2019. We will not deal with previous periods unless you expressly support it and we approve. The lower part of your letter of commitment must include confirmation of the conditions that verify that the client understands the business contract. Engagement letters can be effective for a very long time. It is recommended that the terms of the agreement be reviewed at least once a year to ensure that any updates are taken into account if necessary. If changes are required, a new engagement letter or supplement letter should be put in place. On the other hand, the VPA is intended to convey value.
This is really nothing more than a reminder of the meeting of minds between the CPA and the client. It is deliberately written in very simple words that specify what to do, the magnitude, the price, the terms of payment and the guarantee of value.