Engagement letters are an effective medium through which you can smartly expand your business while alleviating risks. Such types of letters depict the details of the contract between your firm and your clients.
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. There are numerous benefits of an accounting engagement letter, but let us first understand what exactly it is, what to include, and why accountants need it.
What Is a Bookkeeping Engagement Letter?
A engagement letter describes the scope of work or services that your firm will render to the client. Besides the scope of services, it also includes the fee structure and the duration of the service. Bookkeepers usually get them signed by the clients before they commence their work as an acknowledgment for the accounting services provided within a specified duration.
Check Out Free Bookkeeping Engagement Letter Templates Below!
Bookkeeping engagement letters are a powerful tool for expanding your business while alleviating risks. It can also serve as an official legal document in case of any disputes. That’s why we provide bookkeeper engagement letters templates below.
Download and use them to draft yours.
Why Do Bookkeepers Need an Engagement Letter for Bookkeeping Services?
The engagement letter serves as proof and is an important document for legal protection in case of any dispute eventually. As such letters communicate the role, fees, duration, terms of services, terms of payments, and responsibilities of concerned parties, therefore making it a legally binding document.
What Are The Benefits of a Bookkeeping Engagement Letter?
Other than legal binding, there are numerous other benefits of such a letter, such as:
It sets expectations by defining role
The accounting engagement letter sets expectations of the services offered by you in the minds of your client. It clearly describes your firm's working relationship with your clients. 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.
It alleviates risks
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.
What to include in your accounting services engagement agreement?
Don’t know where to start? Take a look at the pointers below and include them in your bookkeeping engagement letter.
- Name and complete address of your client
- Define the list of services your firm is going to provide in detail
- Define the scope of both the parties
- Give a break-up of fees based on the services offered
- Be very clear about the payment policy
- Start and end date of the services
- Inform your clients about how to proceed
Check Out Free Bookkeeping Engagement Letter Templates Below!
Bookkeeping engagement letters are a powerful tool for expanding your business while alleviating risks. It can also serve as an official legal document in case of any disputes. That’s why we provide bookkeeper engagement letters templates below.
Download and use them to draft yours.
Conclusion
Have a look at the bookkeeping engagement letter template we have created to help you to understand it in a better way. CocoSign has numerous employment templates from which you can choose the one that suits the accounting services offered by your firm.
DOCUMENT PREVIEW
ACCOUNTANT / BOOKKEEPING ENGAGEMENT LETTER
_______________________
_______________________
_______________________
_______________________
Re: _______________________
Dear _______________________,
I. The Parties. This Accountant/Bookkeeping Engagement Letter (“Letter”) confirms the services of _______________________ (“Accountant/Bookkeeper”) requested by _______________________ (“Client”) on this date of _______________________, 20____.
Whereas, the Client and Accountant/Bookkeeper (“Parties”) agree to the following terms and conditions for the Accountant’s/Bookkeeper’s services, as an independent contractor, in exchange for fees:
II. Services. The Accountant/Bookkeeper agrees to provide the following services: (check all that apply)
☐ - Accounts Payable
☐ - Accounts Receivable
☐ - Audit
☐ - Bank Reconciliation
☐ - Bill Payment
☐ - Budget Preparation
☐ - Customized Reports
☐ - Detailed General Ledgers
☐ - Financial Statements
☐ - General Bookkeeping
☐ - Payroll and Check Registers
☐ - Tax Calculation & Filing
☐ - Other: _______________________________________________________.
The aforementioned selections shall be referred to as the “Services”. The Accountant/Bookkeeper shall conduct the Services within the specifications and guidelines set by the Client. The Accountant/Bookkeeper shall, at all times, observe and comply with generally accepted bookkeeping and accounting practices and standards while complying with all Federal and State laws, regulations, and procedures when completing their Services in accordance with this Letter.
III. Fees. The Client agrees to pay the Accountant/Bookkeeper: (check one)
☐ - Per Hour. $____ / hour for providing the Services.
☐ - Fixed Amount. $________________/ as the total amount for the Services.
☐ - Other. _____________________________________________________________
IV. Payment. The Client shall pay the Accountant/Bookkeeper: (check one)
☐ - Recurring Payment. Paid ☐ weekly ☐ bi-weekly ☐ monthly ☐ quarterly ☐ yearly.
☐ - Upon Completion. Upon completion of the Services to the Client.
☐ - Other. _____________________________________________________________
V. Expenses. The Client shall: (check one)
☐ - Pay Expenses. In addition to the Fees provided in Section III, the Client agrees to reimburse the Accountant/Bookkeeper for any out-of-pocket expenses incurred that include, but are not limited to, travel expenses, audit fees, tax fees, and postage.
☐ - Not Pay Expenses. All expenses, including, but not limited to, travel expenses, audit fees, tax fees, and postage shall be the responsibility of the Accountant/Bookkeeper.
VI. Retainer. The Client shall: (check one)
☐ - Pay a Retainer. In the amount of $________________ that shall act as an advanced payment on the Services provided by the Accountant/Bookkeeper.
☐ - Not Pay a Retainer.
VII. Term. The Term of this Letter shall be: (check one)
☐ - Fixed Time-Period. Starting _________________, 20____ and ending _________________, 20____.
☐ - Ongoing Period. The arrangement of the Services provided by the Accountant/Bookkeeper shall be on-going beginning on _________________, 20____.
☐ - Other. _____________________________________________________________
VIII. Termination. This Letter may be: (check one)
☐ - Terminated by Both Parties. By providing the other party at least ____ days’ written notice.
☐ - Terminated by Client ONLY. By providing the Accountant/Bookkeeper ____ days’ written notice.
☐ - Terminated by Accountant/Bookkeeper ONLY. By providing the Client ____ days’ written notice.
Unless the Accountant/Bookkeeper has not performed the Services in accordance with this Letter, the Client shall pay the Accountant/Bookkeeper, in-full, for any remaining balance owed following the termination of Services.
IX. Client’s Obligations. The Client shall be solely responsible for providing the Accountant/Bookkeeper all financial information related to their personal and/or business affairs including, but not limited to, all materials, data, and documents necessary to perform the Services under this Letter. The Client acknowledges and agrees that the accuracy of financial information supplied to the Accountant/Bookkeeper is the sole responsibility of the Client and the Accountant/Bookkeeper shall be held harmless from any liability resulting from the accuracy of the financial information provided.
X. Employment Status. The Parties agree that the Accountant/Bookkeeper shall provide the Services to the Client as an independent contractor and shall not be acting or determined to be an employee, agent, or broker. As an independent contractor, the Accountant/Bookkeeper shall be required to follow all requirements in accordance with the Internal Revenue Code which includes, and is not limited to, payment of all taxes levied for fees collected by the Client for payment of their employees, agents, brokers, and subcontractors. The Accountant/Bookkeeper understands that the Client shall in no way withhold any amounts for payment of any taxes from the Accountant/Bookkeeper’s accumulated fees for Services.
XI. Confidentiality. The Accountant/Bookkeeper, shall in the course of performing the Services hereunder, may gain access to certain confidential or proprietary information of the Client. Such “Confidential Information” shall include all information concerning the business, affairs, products, marketing, systems, technology, customers, end-users, financial affairs, accounting, statistical data, documents, discussion, or other information developed by the Accountant/Bookkeeper hereunder and any other proprietary and trade secret information of the Client whether in oral, graphic, electronic or machine-readable form. The Accountant/Bookkeeper agrees to hold all such Confidential Information of the Client in strict confidence and shall not, without the express prior written permission of the client, disclose such Confidential Information to third (3rd) parties or use such Confidential Information for any purposes whatsoever, other than the performance of its obligations hereunder. The obligations under this section shall survive the termination or expiration of this Letter.
XII. Assignment. The Accountant/Bookkeeper shall have no rights to assign any of their rights under this Letter or delegate the performance of any of the obligations or duties hereunder, without the prior written consent of the Client. Any attempt by the Accountant/Bookkeeper to assign, transfer, or subcontract any rights, duties, or obligations arising hereunder shall be void and of no effect.
XIII. Notices. Any notices, bills, invoices, or reports required by this Letter shall be deemed received on the day of delivery if delivered by hand, standard mail, e-mail, or facsimile during the receiving party’s regular business hours.
XIV. Governing Law. This Letter shall be construed in accordance with and governed by Federal laws and those located in the State of _____________________.
XV. Dispute Resolution. 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.
XVI. Severability. If any provision of this Letter shall be held to be illegal, invalid or unenforceable under present or future laws, such provisions shall be severable, this Letter shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part of this Letter; and, the remaining provisions of this Letter shall remain in full force and effect.
XVII. Limitation of Liability
. In no event shall either party be liable to the other party for any indirect, incidental, consequential, special or exemplary damages, including without limitation, business interruption, loss of or unauthorized access to information, damages for loss of profits, incurred by the other party arising out of the services provided under this Letter, even if such party has been advised of the possibility of such damages. In no event will neither party’s liability on any claim, loss or liability arising out of or connected with this Letter shall exceed the amounts paid to the Accountant/Bookkeeper during the period immediately preceding the event giving rise to such claim or action by the Client or the limits of the Accountant’s/Bookkeeper’s professional liability policy, whichever is greater of the errors and omissions policy that is in place.
XVIII. Indemnification. Each party shall at its own expense indemnify and hold harmless, and at the other party’s request defend such party affiliates, subsidiaries, and assigns its respective officers, directors, employees, sublicensees, and agents from and against any and all claims, losses, liabilities, damages, demand, settlements, loss, expenses, and costs, including attorneys’ fees and court costs, which arise directly or indirectly out of or related to any breach of this Letter or the gross negligence or willful misconduct of a party’s employees or agents.
XIX. Entire Letter. This Letter is the final, complete and exclusive agreement of the parties with respect to the subject matter hereof and supersedes and merges all prior or contemporaneous representations, discussions, proposals, negotiations, conditions, communications, and agreements, whether written or oral, between the parties relating to the subject matter hereof and all past courses of dealing or industry custom. No modification of or amendment to this Letter shall be effective unless in writing and signed by each of the Parties.
XX. Waiver. The waiver by either party of a breach of or a default under any provision of this Letter shall not be effective unless in writing and shall not be construed as a waiver of any subsequent breach of or default under the same or any other provision of this Letter, nor shall any delay or omission on the part of either party to exercise or avail itself to any right or remedy that it has or may have hereunder operate as a waiver of any right or remedy.
IN WITNESS WHEREOF the parties have duly executed this Letter as of the date first written.
Accountant’s /Bookkeeper’s Signature __________________________
Date _____________________
Print Name _____________________
Client’s Signature __________________________
Date _____________________
Print Name _____________________
