bookkeeping engagement letter

This is because you must have the terms and conditions all laid out explicitly before a legal relationship forms and work begins. You will find it very difficult to set the scope of work, agree on expectations, and enforce timeframes without such an agreement. It is essential to renew your engagement letters regularly, preferably annually. Renewing annually gives you a chance to review your prices and if the scope needs to change. If additional services are required, this gives you a chance to allocate the proper amount of time and adjust your fees accordingly.

bookkeeping engagement letter

Your engagement letter should also include a timeline for completing the work. This helps set expectations for both you and your clients – after all, nobody wants their work dragging on forever! If there are any delays with the project, send your clients an update to know what’s going on. If you offer your bookkeeping services under your business name, use that. This letter is to confirm our mutual understanding of the terms of our engagement to provide accounting and review services for your firm. Setting the billing upfront (whether it’s a flat rate or hourly fees) forces this discussion to take place prior to the project.

It alleviates risks

If this letter correctly expresses your understanding, please sign the enclosed copy where indicated and return it to us. CocoSign is an easy and affordable alternative to DocuSign, helping SMBs and professionals sign contracts 5x faster. In the amount of $________________ that shall act as an advanced payment on the Services provided by the Accountant/Bookkeeper.

If any dispute arises (between/among) the parties hereto, the parties agree first to try in good faith to settle the dispute through non-binding mediation. The parties recognize they have knowingly and voluntarily agreed to waive all rights to have any such dispute determined by a jury, but otherwise retain all rights afforded under the applicable civil justice system. All disputes under this Letter shall be settled by arbitration in the State of governing law before a single arbitrator pursuant to the commercial law rules of the American Arbitrator Association. Arbitration may be commenced at any time by any party hereto giving written notice to the other party to a dispute that such dispute has been referred to arbitration. Any award rendered by the arbitrator shall be conclusive and binding upon the parties hereto. This provision for arbitration shall be specifically enforceable by the parties and the decision of the arbitrator in accordance herewith shall be final and binding without right of appeal.

This document protects both parties by setting clear expectations from the start of the relationship. The accounting engagement letter sets expectations door hangers are of the services offered by you in the minds of your client. It clearly describes your firm’s working relationship with your clients.

What Is a Bookkeeping Engagement Letter?

Any cost for mediation services will be split equally between both parties. As an accountant, having an engagement letter helps you determine how much of your resources to allocate to the project and calculate the profitability of each engagement. Our responsibility is to express an opinion on the financial statements based on our audit and is limited to the period covered by our audit.

If there are areas that you are as yet unsure of, make a note of that. Once you both have enough information to proceed, sign an updated bookkeeping engagement letter. Your bookkeeping engagement letter must list every task and the corresponding duties and responsibilities for each. This is the deadlines by when each part of the bookkeeping work must be completed. You will save a ton of time creating engagement letters for clients if you have a template prepared for bookkeeping engagements that can be customized.

Include the names and addresses of both parties, as well as the date of the agreement. Then, outline the bookkeeping services to be provided, the payments to be made and the due dates for those payments. It lays out the bookkeeping services that will be provided, how much you will charge for your services, and the payment structure and due dates.

Think of your new engagement letter as a way to clearly define the terms, fee structure, and services inside your proposal. We are thrilled you have chosen our firm to provide quarterly compilation services for your business and an annual review. The short answer is yes, you should have an engagement letter at the beginning of every engagement and have a signed agreement prior to commencing work. It could be the serial refinancers who need updated financial statements every couple of weeks as they chase down the best rate. Or the business client who comes across some unique investment idea requiring thorough tax projections and hours of research.

A bookkeeping engagement letter is a written document or letter that, among other components, captures the scope of services that a bookkeeper intends to provide to a new or old client. Though not exactly a contract, a bookkeeping engagement letter (and all other engagement letters) is often a legally binding document that both parties have to sign to formalize or legalize their agreement. Bookkeepers who have taken up professional liability insurance coverage are also expected to abide by the terms of a bookkeeping engagement letter. While speaking about the bookkeeping engagement letters, accounting firms are widely using them in this highly competitive business niche. It is imperative to have a written bookkeeping contract with your clients to avoid any misunderstandings in the future.

Limitations of Liability

Ideally, it is recommended that engagement letters be used for all engagements. It is possible to utilize a single format for several identical services and different formats for services that are not identical. For lengthy projects, be sure to review and update the engagement letter quarterly, bi-annually, or annually. To make writing engagement letters easier, consider reviewing a few samples online. You may also want to have a liability attorney look over your engagement letter to ensure it covers the elements necessary to avoid professional malpractice suits. Engagement letters help you avoid issues down the road with your client in terms of payment and expectations.

The letter should outline all services that are included in the scope of work. Services included in the scope of work should be well-defined in as thorough of terms as possible. The engagement letter serves as proof and is an important document for legal protection in case of any dispute eventually.

It’s a win-win for everyone involved and a crucial part of onboarding. Over 6,000 accountants and bookkeepers use Jetpack Workflow to standardize client work, automate deadlines, and track firm progress. The important thing is to define your billing practices in advance.

  • All monthly bookkeeping services will be completed by the 15th of the month.
  • In addition, each party has been given the opportunity to walk away while knowing the full picture.
  • Such kinds of letters establish a good impression in front of your clients as they demonstrate your professionalism and the way you run the business.
  • At this point, you either have to suffer the loss or renegotiate your rates.
  • All weekly bookkeeping services will be completed by Wednesday each week unless there is a holiday, in which case all services will be completed by Thursday.

That’s why an engagement letter is a crucial piece of any new bookkeeping project. The letter spells out the expectations, timeframes, and scope of work included so all parties are on the same page. Bookkeeping engagement letters are a powerful tool for expanding your business while alleviating risks.

Limitations of liability

Assistance to be supplied by your personnel, including the preparation of schedules and analyses of accounts, is described in a separate attachment. Timely completion of this work will facilitate the completion of our audit. However, we will inform you of any material errors, and all irregularities or illegal acts, unless they are clearly inconsequential, that come to our attention.

If I am not able to e-file your returns, you will be solely responsible to file the returns with the appropriate taxing authorities. This letter can apply to future years of tax preparation services unless the agreement is terminated or amended in writing. Join the thousands of other bookkeepers our collection of 32 customizable accounting workflow templates and checklists here. A written contract is always preferable over a verbal contract, therefore it becomes important to include all the important details of the terms of service. As the bookkeeping engagement letter is a written contract, it protects you from clients that keep on asking your firm to do a bit extra work within the agreed budget. A engagement letter describes the scope of work or services that your firm will render to the client.

Accountant / Bookkeeping Engagement Letter

Another way to help implement engagement letters more efficiently is by using a standard terms-and-conditions addendum. This is a set of standard, firmwide terms and conditions that are updated periodically and attached as an addendum to every engagement letter issued by the firm. Standard terms and conditions apply to all engagements and give the firm and the client the benefit of a single understanding addressing the key contractual elements of the relationship. In addition to helping a firm manage its risk consistently across the firm, a standard terms-and-conditions addendum reduces the amount of language that is required to be updated for each engagement. A bookkeeping engagement letter is a formal agreement between a bookkeeper and a client. It outlines the expectations, services, and terms of the relationship.

Please keep in mind that this is only an estimate and that, depending upon the time required and the complexity of the action, actual costs may exceed this estimate. This Agreement, and the rights and obligations of the Parties hereunder, shall be governed by and construed in accordance with the laws located in the State where the services are being provided. Our responsibility in this engagement consists of completing the bookkeeping activities outlined above with care and due diligence. All communication from your firm will be answered within 48 hours.

You have a new bookkeeping client, and you’re ready to get to work. But did you know that it’s also essential to have a written agreement in place with your client before starting that work? This document is called an engagement letter, and it outlines the specific accounting services you will provide and all the necessary details. My engagement to prepare your tax returns will conclude with the delivery of the completed returns to you (if paper-filing), or your signature and our subsequent submittal of your tax return (if e-filing).


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