The Reasons Oral Advice Documentation Is Essential

The Reasons Oral Advice Documentation Is Essential

Once oral advice is given by an expert and based on professional standards, it is easy to overlook one most important thing: documentation. You may not appreciate its importance today, but you will in the future especially if you are already dealing with professional liability claim.

Everything must be put in writing otherwise, defense will be considered weak. In fact, there are many cases regarding the failure to document oral advice and it resulted to a costly mistake. It does seem very trivial if you don’t dig deeper into it but once you are put in a situation where you need to present strong evidence that the discussion between you and the consultant really took place, the documentation will definitely suffice.

What are the key items that should be present in your documentation?

For general questions, documentation consists of basic notes will do. However, the key items or elements must still be present in this documentation. The first item that must be included in the documentation is the date that the discussion happened. This is one of the most important things that should not be overlooked along with the name of the participants.

Aside from the name and date, the facts, advice and recommendations must also be present. If there are tax or accounting considerations, it must be included as well. If the advisor or consultant requested a follow up from client, it must be put in writing as well.

What about unsolicited advice?

When it comes to client’s business operations, unsolicited advice may be considered necessary especially if it will make room for the improvement of the company’s work flow and enhancement of the system. This usually falls under general advice and the discussion will only be documented in firm working papers.

However, for more serious matters, especially if the advice will create a huge impact on client operation, the documentation must be accurate and concise. The key elements should not be forgotten because if there are some allegations against the consultant, the documentation is going to be instrumental.

Consulting Engagements And Its Special Considerations

If extensive discussions between the consultant, client and third parties took place, all of the essential information must be notated. However, the client or the consultant must keep in mind that the advice should be treated with confidentiality and should not be shared to a third party as there may be a tendency that the third party will claim reliance on the information that was provided.

The working papers must have the documentations of the discussions, the parties involved and the date it was held. Confirming the oral advice in a written report must not also be forgotten.

Documenting oral advice must not be taken lightly especially if it will impact client operation. The damage will be irreparable if you allow oral advice to go undocumented. Just imagine the chaos it will bring if you failed to document important advice. When disputes are taken to court, the advisors will be pay such a high price for their negligence to document the advice. Even if advisors or consultants have claimed they provided advice to the client, the statement will not be acknowledged unless the documentation is presented.

Tamara Deterding

Written by : Tamara Deterding