Frequently asked engagement letter questions

Then add reasonable turnaround times for the work after the information is provided. Billing has been mentioned a few times already because its importance is paramount. If you have not outlined the cost of the project, it hampers your ability to go after the client in the event they refuse to pay all or part of your bill.

• List the services your firm will provide and how often you'll provide them.
• Along with the scope and timeline, compensation should be clearly defined in the letter.
• This letter is to confirm our mutual understanding of the terms of our engagement to provide bookkeeping services for your firm.

At the conclusion of our audit, we will request certain written representations from you about the financial statements and matters related thereto. This part of the engagement letter is included to protect the client and assure them you want to maintain the confidentiality of their books and finances. Though this part does not directly benefit the bookkeeper, it’s important to state you intend to protect the client’s data.

Define billing

But the benefits you’ll receive make that work worthwhile, many times over. You can automate the creation of detailed engagement letters through Ignition. Consolidating all related aspects into a single online proposal is possible, which allows for streamlined client communication and agreement.

• Remember to have an attorney familiar with the laws in your jurisdiction review your templates for enforceability.
• Evergreen engagement letters indicate that services will continue unchanged until either party terminates the professional relationship, and they do not specify when the engagement will end.
• It’s possible you will end up having several agreements in effect for a single client.
• This free resource includes a ton of the most popular accounting templates including monthly bookkeeping, weekly accounting analysis, client onboarding procedures, and common tax return forms.
• Should I encounter instances of unclear tax law, or of potential conflicts in the interpretation of the law, I will outline the reasonable courses of action and the risks and consequences of each.
• This section defines the boundaries of the engagement and helps prevent scope creep.

Hourly rates for different professionals should be included, if relevant. In essence, a bookkeeping engagement letter stands as a vital tool for setting the tone, boundaries, and expectations, making the bookkeeping journey a well-structured and transparent expedition. Examples are for illustrative purposes only and not intended to establish any standards of care, serve as legal advice, or acknowledge any given factual situation is covered under any CNA insurance policy.

BONUS: Simplify Your Accounting Workflows with This Free Resource

The sample bookkeeping engagement letter we offer at Financial Cents makes it easier to present a professional image. 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. 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. We will conduct our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.

Scope of services

First and foremost, your bookkeeping engagement letter should provide the date of the agreement. Define a provision in the letter for how the agreement can be terminated without repercussions. For example, you might say that a bookkeeper must give 30 days’ notice by email and train a replacement whom the client must hire within 15 days of notice being served. Then you must include how many days’ notice the client must provide to the bookkeeper before they find themselves without a job. For renewal, simply state whether the agreement terminates automatically and when.

A Clear & Simple Bookkeeping Engagement Letter – Template

You may or may not need to include every member of your team who will be working on the engagement (although some government and quasi-government clients will want this information). This might seem obvious, but for the contract to be official, you can’t have the client sign a generic letter and expect it to hold up. An up-to-date engagement letter will help mitigate any potential disputes or misunderstandings that could arise. It's a small investment of time that can save a lot of trouble down the line.

Once you've drafted up your bookkeeping engagement letter or customized an engagement letter template, you should consult a legal professional in your area to review it and to have your questions answered. This investment will pay for itself in the future for any dispute resolution you may have to deal with. Basically, an engagement letter puts into writing everything about the project. It includes the clear details of what the client and contractor agreed to.

In case of any discrepancies, the clear wording of the letter will set things to rights again. While CPA firms can help out with any of these requests, you also need to safeguard your time and get compensated for additional services. To protect yourself from time drains, minimize your professional liability, and maintain your firm’s profitability, you need to ensure your total costs for health care you have an engagement agreement in place for each project. As with any contract, it's crucial to review and update engagement letters regularly. Firms evolve, as do the services that a bookkeeper might provide to a client. An annual review can ensure that the scope of services, fee structure, and other details still accurately reflect the reality of the engagement.

Template for a Bookkeeping Engagement Letter

This document is called an engagement letter, and it outlines the specific accounting services you will provide and all the necessary details. Especially where financials are concerned, you must execute an official confidentiality agreement. This outlines the intent of the bookkeeper to maintain the confidentiality of their books and finances. It also includes the responsibility of the client to secure and protect other avenues of access to all the accounts. If several people are using the same credentials, you can’t hold a specific individual responsible. We’ve created a sample accounting engagement letter template below, which you can use as a starting point.