Software for Engagement Letters
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What Accountants Need to Look for in Software for Engagement Letters

Accountants are always looking for ways to make their work easier and more productive. One of the most important documents they deal with is engagement letter.
9 January 2025
10 Min Read
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You’ve sent another engagement letter by email attachment. The client prints it, signs it, scans it back, and you file it somewhere between your desktop and a practice management folder you’ll never find again. 

Three months later, they’re demanding services you never agreed to provide. You search frantically for the original letter to prove what you actually committed to. This scenario costs UK accounting firms thousands in written-off time and strained client relationships every year. 

Engagement letter software eliminates this chaos by automating creation, tracking signatures, and maintaining permanent audit trails. But not all platforms deliver on their promises. This guide shows you exactly what to look for and why FigsFlow stands out as the complete solution for modern accounting practices. 

Key Takeaways 

  • Engagement letter software must include ICAEW, ACCA, and UK GDPR compliance built into templates, not as optional add-ons 
  • Digital signatures are legally binding under UK law when properly implemented with audit trails 
  • Complete platforms integrate engagement letters with proposals, AML checks, and client onboarding workflows 
  • Manual letter creation takes 30 to 45 minutes per client while automated systems reduce this to 30 seconds 
  • Proper software maintains five-year audit trails with timestamps for every compliance action 
  • Integration with existing tech stacks (Xero, QuickBooks, HubSpot) eliminates duplicate data entry 
  • Template libraries should update automatically when regulatory requirements change 

What is an Engagement Letter?

An engagement letter is a legally binding contract between your accounting firm and your client. It defines the exact services you will provide, establishes fee structures, and outlines both parties’ responsibilities throughout the professional relationship. 

Courts recognise these documents as enforceable contracts when disputes arise. This makes them your first line of defence against scope creep, fee disagreements, and unrealistic client expectations. 

The letter must specify deliverables with precision. Saying you’ll provide “bookkeeping services” isn’t sufficient. You need to state whether this includes bank reconciliation, VAT returns, payroll processing, or management accounts. Service exclusions matter just as much as inclusions. 

Regulatory bodies including ICAEW and ACCA provide framework guidance for drafting compliant letters. These frameworks ensure your documentation meets professional standards while protecting both your firm and your clients from misunderstandings. 

Proposals vs Engagement Letters: Know the Difference 

Learn when to use a Letter of Intent versus an Engagement Letter and how each document protects your firm at different stages of client relationships. 

Read: LOI vs LOE – What’s the Difference? → 

8 Essential Features Your Engagement Letter Software Must Have

Feature Description
Regulatory Compliance Templates Pre-built templates that meet ICAEW, ACCA, CIOT, and UK GDPR standards without manual customisation. Templates must update automatically when regulations change to maintain ongoing compliance.
Automated Service Selection Browse categorised service libraries (accounting, bookkeeping, tax, audit) and select relevant offerings with clear scope definitions. System should auto-populate service descriptions and legal clauses.
Dynamic Pricing Calculator Real-time fee calculation based on service complexity, transaction volumes, and market rates. Must include VAT calculations and discount application with transparent breakdowns for clients.
Built-in E-Signature Legally binding digital signature capability compliant with UK electronic signature regulations. Should track signature status, send automated reminders, and timestamp all signing actions.
Professional Branding Complete customisation with your firm's logo, colours, fonts, and document formatting. Letters should look like they came from your practice, not generic software.
Complete Audit Trails Automatic timestamping of every action including document creation, edits, sends, views, and signatures. Must maintain records for five years to satisfy MLR 2017 requirements.
CRM Integration Direct connection to practice management and CRM systems (HubSpot, Xero, QuickBooks) for automatic client data import. Eliminates manual data entry and reduces errors.
Secure Client Portal Dedicated portal where clients review documents, upload supporting materials, and sign agreements without email attachments. Must include document tracking and automated status updates.

Software that lacks any of these eight features forces you into manual workarounds. These workarounds consume time, introduce errors, and create compliance gaps that expose your firm during regulatory reviews. 

The difference between adequate software and excellent software shows up during HMRC supervision visits. When supervisors request your compliance documentation, you need instant access to complete audit trails proving every step of your process. 

Ready to See Compliant Templates in Action?  

Discover how FigsFlow generates ICAEW and ACCA-compliant engagement letters in 30 seconds with built-in audit trails and e-signatures. 

Learn: How to Automate Engagement Letters With FigsFlow → 

Beyond Basic Engagement Letters: What to Look for in Software for Engagement Letter

Engagement letter software that only handles signatures misses the bigger picture. The best platforms connect engagement letters to the entire client lifecycle, from initial proposal through ongoing compliance. 

AML Compliance Integration

Money Laundering Regulations 2017 require customer due diligence before establishing client relationships. Separate AML software creates dangerous gaps between engagement acceptance and compliance verification. 

Integrated platforms trigger AML checks automatically when clients sign engagement letters. FigsFlow completes identity verification in approximately 30 seconds, checking details against authoritative sources including the electoral register, credit reference agencies, and Companies House records. Complete audit trails record every compliance action with timestamps for HMRC supervision visits. 

Proposal Management

Proposals and engagement letters serve different purposes but belong in the same workflow. You send proposals to win new business, then convert accepted proposals into formal engagement letters. 

Comprehensive platforms generate both documents from a single service selection process. You choose services once, configure pricing once, and the system produces professional proposals alongside compliant engagement letters without duplicate data entry. When you adjust service scope during negotiations, changes flow automatically to both documents. 

Client Onboarding Automation

Manual onboarding scatters information across email threads, desktop folders, and filing cabinets. Automated platforms provide secure client portals with clear instructions about exactly what documents clients need to provide. 

The portal adapts based on client type. Real-time tracking shows submission status for every required document. Automated reminders go to clients with incomplete submissions without manual follow-up from your team. 

Team Collaboration Tools

Multiple team members need access to engagement letters at different process stages. Role-based access control lets you define exactly who can create, edit, approve, or view engagement letters. Custom roles adapt to your firm’s hierarchy without forcing you into predetermined permission structures. 

Centralised dashboards show every team member their pending tasks. Partners see letters awaiting approval, managers see drafts requiring review, and administrative staff see unsigned letters needing follow-up. 

Reporting and Analytics

Engagement letter software generates valuable operational data that most firms never analyse. Advanced platforms track proposal acceptance rates, showing which services convert prospects into clients most effectively. 

Deal conversion analytics reveal bottlenecks in your client acquisition process. Revenue analytics by service type show which offerings generate the most profitable value for your firm, guiding resource allocation decisions. 

How FigsFlow Delivers on All Requirements

FigsFlow isn’t just faster than manual processes. It’s designed specifically for UK accounting firms that need speed, compliance, and integration in one platform. 

The 3-Step Engagement Letter Process

FigsFlow reduces engagement letter creation to three steps taking approximately 30 seconds total. 

  • Step 1: Service Selection – Access the proposal generator from your dashboard and select services from organised categories including bookkeeping, accounting, VAT, payroll, and advisory services. The platform handles multiple service selection for clients requiring comprehensive packages. 
  • Step 2: Client Details and Pricing – If you’ve integrated FigsFlow with HubSpot, client information imports automatically. Otherwise, select from your contact list or add new clients. The pricing calculator displays real-time fees as you adjust transaction volumes and service complexity factors. 
  • Step 3: Generate and Send – The system creates a branded PDF with all details populated including service descriptions, fee structures, payment terms, and regulatory compliance clauses. Toggle between proposal and engagement letter tabs, review both documents, and send for digital signature. 

Clients receive emails with embedded document links, review everything in their browser, and sign electronically without printing or scanning. The system timestamps every action creating automatic audit trails. 

Real Compliance, Not Checkbox Compliance

ICAEW provides five-part guidance covering engagement letter structure, service schedules, additional wordings, terms of business, and privacy notices. FigsFlow templates incorporate this complete framework ensuring every generated letter meets professional body standards. 

ACCA compliance requires explicit service scope statements, limitation of liability clauses, and client responsibility definitions. These elements appear automatically in FigsFlow letters based on the services you select and client type you specify. 

UK GDPR compliance demands privacy notices explaining data collection purposes, processing legal basis, and storage methods. FigsFlow includes compliant privacy notice templates that update automatically when data protection regulations change. 

The platform maintains this compliance passively. You’re not researching regulatory updates or manually editing templates when professional body guidance evolves. 

Complete Platform Integration

FigsFlow connects directly to HubSpot for automatic client data import. When deals close in your CRM, client information flows to FigsFlow without manual transfer. 

Xero and QuickBooks integration enables automatic client list synchronisation. You maintain one source of truth for client information across all platforms. Changes in your accounting software reflect immediately in FigsFlow. 

Companies House integration provides automatic company verification for corporate clients. The system retrieves incorporation details, registered office addresses, and director information directly from official registers during the onboarding process. 

Time Savings That Actually Matter

Manual engagement letter creation consumes 30 to 45 minutes per client. You’re copying service descriptions from old letters, adjusting clauses for client circumstances, calculating fees, formatting documents, and preparing emails. 

FigsFlow completes this entire process in 30 seconds. Service selection takes approximately 10 seconds, client configuration and pricing takes 10 seconds, and preview review takes 10 seconds. 

For practices onboarding 10 new clients monthly, this saves approximately 5 to 7.5 hours monthly. At typical partner hourly rates of £150 to £200, that represents £750 to £1,500 in recovered billable time every month. AML compliance automation provides additional time savings, completing checks in 30 seconds that typically consume 45 to 60 minutes per client. 

Explore Everything FigsFlow Offers 

These features are just the beginning. Discover how pricing automation, integrations, and workflow management transform your entire practice. 

Explore All Features → 

What to Do Next

You’ve seen what proper engagement letter software should deliver and how FigsFlow meets every requirement. Taking action separates firms that modernise from firms that continue wasting time on manual processes. 

  • Start Your Free Trial – Test FigsFlow with actual client situations. Create engagement letters for your three most recent new clients while timing the process against your current manual workflow. 
  • Audit Your Current Process – Document exactly how long you currently spend creating engagement letters from initial draft through final signature. Calculate this time investment multiplied by your typical monthly new client volume. 
  • Calculate Your ROI – Multiply your time savings per client by monthly new client volume. Convert this recovered time to billable value using your actual hourly rates. Most firms achieve positive ROI within the first month. 

Ready to Take Your First Step? 

Start your 30-day free trial and create your first automated engagement letter in 30 seconds. 

Try FigsFlow Free for 30 Days → 

Additional Resources 

Conclusion

Engagement letter software must deliver more than document generation. It needs built-in compliance, automated workflows, complete audit trails, and integration with your existing tech stack. 

FigsFlow provides all eight essential features in a platform designed specifically for UK accounting practices. The 30-second engagement letter process, integrated AML compliance, and comprehensive client onboarding eliminate the manual chaos that wastes hours weekly. 

Your competitors are already automating these workflows while you’re still copying service descriptions from old letters. Start your free trial today and see how quickly proper software transforms your practice management. 

See FigsFlow in Action 

Watch how FigsFlow creates compliant engagement letters in 30 seconds, from service selection to digital signature. 

Watch the Demo → 

Frequently Asked Questions

What makes engagement letter software compliant with professional body standards?

Compliant software incorporates templates based on ICAEW, ACCA, and CIOT framework guidance including mandatory clauses for service scope, limitations, client responsibilities, and UK GDPR privacy notices. Templates must update automatically when regulatory requirements change. 

How long should creating an engagement letter actually take?

Manual creation typically consumes 30 to 45 minutes including service description writing, fee calculation, and document formatting. Automated platforms like FigsFlow reduce this to approximately 30 seconds from service selection through sending. 

Are digital signatures on engagement letters legally binding in the UK?

Yes, electronic signatures are legally enforceable under UK law when properly implemented with audit trails documenting signature dates, IP addresses, and signer identity verification. Courts recognise these as equivalent to handwritten signatures. 

Should AML compliance be integrated with engagement letter software?

Integrated systems eliminate dangerous gaps between engagement acceptance and compliance verification. When clients sign letters, AML checks trigger automatically ensuring you never begin work before completing required customer due diligence under MLR 2017. 

What integrations should engagement letter software include?

Essential integrations include CRM systems (HubSpot) for client data import, accounting software (Xero, QuickBooks) for client list synchronisation, email platforms (Outlook, Google) for sending documents, and Companies House for automatic corporate client verification. 

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