Why it matters
The engagement letter is the record of what the firm agreed to do. It reduces the chance of a scope dispute and gives the firm a written basis for asking for the records it needs.
Example
Before the first monthly close, the client signs an engagement letter that names the bookkeeping services, the monthly fee and the client's responsibility to send the bank statements by the 10th.
Related terms
Questions about Engagement letter
Can an engagement letter be signed electronically?
Yes, if the firm keeps a record of who signed, when and the exact text. Many firms send the letter through an e-signature tool and keep the signed copy with the engagement file.