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. Engagement letters are legally binding agreements, but keep in mind that this post is for information only. All information regarding engagement letters is for general informational purposes only. If you offer your bookkeeping services under your business name, use that.

This document protects both parties by setting clear expectations from the start of the relationship. Join the thousands of other bookkeepers our collection of 32 customizable accounting workflow templates and checklists here. Accounting engagement letters should include terms which limit the firm’s liability as much as possible. Statements such as “we will rely on the information provided by the client” or “we will not audit or verify the information” are often included to show the scope of the project does not include auditing services.

What Your Accounting Engagement Letter Should Include

Occasionally there is additional software, platform subscriptions, or other expenses which may crop up in an engagement. The engagement letter should include wording for who is responsible for these additional expenses. Once the bookkeeper has commenced work, it’s often too late to try to define the scope of the project. By establishing boundaries prior to the engagement, each party knows the full scope of the relationship and potential cost. In addition, each party has been given the opportunity to walk away while knowing the full picture.

Including standard terms such as requiring 30 days notice to end the contract allow both parties to know they won’t be abandoned in the middle of a project. The longer answer is it may not always be possible to draft an engagement letter prior to starting a project if the project is particularly time sensitive. However, time sensitive projects have greater potential liability due to their rushed nature. This puts greater significance on having the signed agreement ahead of time to outline your liability and responsibility for the project. At Financial Cents, we understand the importance of a first impression, and we’re here to help.

• All invoices are payable upon receipt and will be set up for pre-authorized bank debit / ACH payments.
• If not, you need to clearly state the engagement is limited to the preparation of a tax return and any additional support needed is outside the scope of the initial engagement.
• An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.
• Occasionally there is additional software, platform subscriptions, or other expenses which may crop up in an engagement.
• The longer answer is it may not always be possible to draft an engagement letter prior to starting a project if the project is particularly time sensitive.

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). 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. 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.

A client’s first impression of your business could make or break a deal. You should always ensure you receive a signed copy of the engagement letter before you start any kind of work for the client to avoid disputes. You will need the client’s full legal name, address, and contact information. You will also need to have a predetermined set of services you will provide as a bookkeeper for your client, how much you will charge for your services and when the payments will be due. Over 6,000 accountants and bookkeepers use Jetpack Workflow to standardize client work, automate deadlines, and track firm progress. Though a bookkeeper cannot avoid liability for negligent work, this language can help if the contract ends under less than ideal circumstances.

An accounting engagement letter is a contract outlining the scope of work, billing rates, and any other relevant terms of the engagement. The contract should be agreed to by all parties prior to commencing work. This engagement letter includes the relevant terms that will govern the engagement for which it has been prepared. Any material changes or additions to the terms set forth in this letter will only become effective if evidenced by a written amendment to this letter, signed by all of the parties.

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You should also include an engagement letter section about the client’s responsibilities in the engagement letter. The letter will need to specify how much the accountant will be paid and when. Compensation may be an hourly rate, flat fee, or a combination of the two.

What is a Bookkeeping Engagement Letter?

Our fees will be billed as work progresses and are based on the amount of time required plus outof-pocket expenses. To hire an accountant a simple agreement must be drafted that outlines the pay and scope of work provided. Due to the accountant having access to financial accounts, it’s highly recommended to use someone that is recommended by friends or family in order to know the person being hired is trustworthy. Your responsibility for this engagement includes providing access to your accounting system and providing the necessary documentation and information necessary to complete bookkeeping. All monthly bookkeeping services will be completed by the 15th of the month.

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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. 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.

Sample – Tax (Filing) Engagement Letter

The number of hours it will take to complete the return is not guaranteed but the hourly rate I charge is $[AMOUNT] / hour. However, if complications are discovered in the process of preparing your tax return, I may need to adjust the fee. Before proceeding with preparation of the return, I will generally contact you in advance if my original quote requires bonus depreciation for 2017 and beyond significant revision due to the amount of work involved. To the extent permitted by state law, an interest charge may be added to all accounts not paid within thirty (30) days. The working papers for this engagement are the property of our firm and constitute confidential information and will be retained by us in accordance with our policies and procedures.

My work will not include procedures to find defalcations or other irregularities. Accordingly, our engagement should not be relied upon to disclose errors, fraud, or other illegal acts, though it may be necessary for you to clarify some of the information you submit. I will, of course, inform you of any material errors, fraud, or other illegal acts I discover.

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. This could include providing you with all necessary paperwork and information or letting you know of any changes that occur within the company. By having this information spelled out up front, you and your client can avoid any misunderstandings later. You can also add what will happen if the client requests extra services outside the scope of the current engagement. This may stem from miscommunications or the client’s unreasonable expectations. You may want to also give a quick company overview to showcase your value and explain the point of the engagement letter.