Bookkeeping Engagement Letter Templates

bookkeeping engagement letter

Or, you may state that your accounting firm does not include any procedures designed to discover fraud or theft and cannot be relied on to find those things, and that this is your client’s responsibility. Stating clear deadlines and tasks saves you trouble, and maybe even a customer, in the future. An accountant/bookkeeping engagement letter is a legal document between a client and a person hired to provide tax preparation and financial services on their behalf.

bookkeeping engagement letter

It’s always a good idea to specify the conditions under which the agreement can be terminated. This could be for various reasons, such as a failure to pay fees, a breach of the terms of the agreement, or simply at the discretion of either party with notice. It’s also essential to stipulate the responsibilities of both parties upon termination, such as the client’s obligation to pay any outstanding fees. Accounting is a global service, and each geographic area has its own regulations, specific structures, and other differences.

How to Improve Client Communication in Accounting Firms

If you belong to a professional organization like the AICPA or the IPBC, they most likely have templates available. Apps like Practice Ignition also provide engagement letter templates as part of their product. For that matter, a simple Google search for “bookkeeping engagement letter template” returns 861,000 results! The accounting engagement letter sets expectations of the services offered by you in the minds of your client.

  • It is necessary to clearly identify the intended recipient of your engagement letter.
  • Other examples of responsibilities which should be defined include gathering statements, interacting with the client’s CPA, and handling financial matters.
  • In order for the accountant to begin work, an agreement must be signed by the client.

This might include specific days of the week or month, or it might be more general, such as “on a monthly basis.” Be sure also to include any deadlines related to these services, such as the end of a financial quarter or tax season. I’m an entrepreneurial CPA that founded Xen Accounting, a 100% cloud-based accounting firm, in 2013. Following its acquisition in 2018, I started Future Firm to help accountants fast-track the growth of a modern, scalable accounting firm of their own. That written agreement will set the expectation for your client, give you a resource to point them back to whenever anything is unclear, and provide a clear look into the type of client you want to attract in your business. Does your firm use an accounting engagement letter when signing on a new client?

Payment Terms

Bookkeeping Services Agreement – For a bookkeeper to provide general services related to organizing and submitting financial records. This letter will confirm the terms and limitations of the audit services our firm, [NAME OF FIRM], has agreed to perform for the Client for the year ending [DATE]. Kathryn is a Chartered Professional Accountant with over 7 years of experience in both public practice and industry accounting. She has had the opportunity to work with a wide variety of individuals and companies, which gives her a unique perspective on what it takes to be successful in the industry. Kathryn loves all things business and productivity and has been able to combine her love for creating content into writing for accounting firms looking to improve their businesses. You might decide to charge 50% upfront and 50% upon completion or break it down into monthly payments, but whatever your terms are, make sure they are apparent in the engagement letter.

If you have any questions about your case, you should contact him/her directly. Our fee is $[AMOUNT] / hour for the aforementioned services performed by our Firm. If you are covering the cost of the software package, be sure to outline how much of the monthly fee is covering that. Our work consists of recording Statement Balance vs Current Balance keeping, and we do not provide any auditing or fraud detection. We are also not responsible for delays caused by delays in receiving information from your firm. File Request Pro offers powerful branding tools to make sure your content collection process looks and feels like it is uniquely yours.

Think of your new engagement letter as a way to clearly define the terms, fee structure, and services inside your proposal. A clear, confident accounting engagement letter helps assure potential clients that you are capable and will do a good job. Promptly sending a solid letter of engagement will also let your client know that your accounting business is well run and organized. The names and addresses of the accountant/bookkeeper and the client will be listed in the letter.

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. Trafft is perfect for business owners who need to streamline their booking experience both for their staff and their clients. Once you have a defined contract with your client, the next step would be to start managing your client appointments effectively. Letters of engagement are necessary for having clear and comprehensive communication with clients.

Withdrawal provisions

If the hired party is an accountancy firm, the name of the accountant or bookkeeper working on the contract will also be provided. Our fees will be billed as work progresses and are based on the amount of time required plus outof-pocket expenses. We will notify you immediately of any circumstances we encounter that could significantly affect our initial estimate of total fees, which will range from $[AMOUNT] to $[AMOUNT] while being paid the hourly rate of $[AMOUNT] / hour. 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.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The term “reasonable assurance” implies a risk that material monetary misstatements may remain undetected and precludes our guaranteeing the accuracy and completeness of the financial statements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

bookkeeping engagement letter

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. 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. This section has to do with the roles you expect the client to play for the successful completion of the project.

All information regarding engagement letters is for general informational purposes only. Finally, your engagement letter should include a clause that outlines how the agreement can be terminated. This is especially important if things go south with the client or decide they no longer need your services.

What Are The Benefits of a Bookkeeping Engagement Letter?

In the engagement letter, you’ll need to describe the services you will offer. These may include budgeting, accounts receivable, accounts payable, and/or advisory services. This minimizes risk for your company, as these types of letters are legally binding.

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If you offer your bookkeeping services under your business name, use that. First and foremost, your bookkeeping engagement letter should provide the date of the agreement. This section usually includes a statement such as “all bookkeeping work is prepared based on the information provided by the client” or something similar that limits the bookkeeper’s liability for information withheld by the client. Though a bookkeeper cannot avoid liability for negligent work, this language can help if the contract ends under less than ideal circumstances. Engagement letters should include a provision for how the contract can be ended by either party. This may include clauses such as requiring 30 days notice from either party to terminate the agreement or a statement clarifying the contract can be terminated by either party without notice.

Ready to find out if workflow software is the right fit for your firm? Select the potential number of users at your company below to get started with your 14-day free trial. 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. 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.

Furthermore, either party may terminate this Engagement Letter for cause in the event the other party breaches any material term and fails to cure such breach within seven (7) days of the non-breaching party’s notice thereof. Take a look at the pointers below and include them in your bookkeeping engagement letter. It is a method through which to document engagements in detail and lay out the terms of a project or service. It provides protection for the service provider and client from litigation. An engagement letter is a way of stating the expectations and terms of a business relationship.

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