Scenario:

You and Sam have been in touch since the Palm Beach Business Development Luncheon, and he has expressed interest in your working on his business audit. The two of you make plans to meet for lunch, but this time at his deli in Boca.

Sam would like a proposal for the services you (T&M) can offer. If he likes the proposal, he is prepared to sign a follow-up engagement letter.

You go back to the office to start work on the proposal. You have learned the Sams Deli is a privately-owned company with annual sales of 1.2 million. The two locations combined have 40-50 employees at any given time. The company has an outstanding bank loan. The bank requires an audit.

Please answer the following questions and make a proposal memo based on the scenario:

1) Include T&Ms fee structure in your proposal. Sam will be billed hourly based on the type of work being done and the level of expertise of the auditor. As partners, both Seth and Anna bill at $250 per hour. Supervisor and manager rates are $170 per hour. Senior staff rates are $125 per hour, and junior staff rates are $80 per hour.

2) The proposal needs to identify what you (T&M) will do and layout the fees for the job at hand, the audit. You will have to estimate how many hours will be needed and who will be performing what type of work for the audit. Bookkeeping, payroll and write up work will be done by junior staff accountants and reviewed by a senior staff member. Tax services will be provided by senior staff and reviewed by Seth or Anna, and the final audit will be reviewed by Anna or Seth.

3) As you want this proposal to serve as a marketing tool as well, mention the advantage of using T&Ms other services, e.g., financial statement audits, corporate taxes, payroll and bookkeeping, the maintenance of Sams personal finances, the preparation of his personal financial statements, and his personal income taxes. This can be your last paragraph.

Please make a proposal memo.