Does your firm use an accounting engagement letter when signing on a new client? My fee will be based on the complexity of the return, and will be quoted in advance of my work. 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 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.
This letter is to confirm our mutual understanding of the terms of our engagement to provide accounting and review services for your firm. Each service you render should be included in the scope of work with as much detail as possible. For example, does your engagement include follow up calls to the IRS, audit support, or document storage? 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.
How to use the Bookkeeping Engagement letter
If you intend to publish or otherwise reproduce the financial statements and make reference to our firm, you agree to provide us with printers’ proofs or masters for our review and approval before printing. You also agree to provide us with a copy of the final reproduced material for our approval before it is distributed. 9 things you didn’t know were tax deductions Our procedures will include obtaining an understanding of the company’s internal control structure and testing those controls to the extent we believe necessary. At the conclusion of our audit, we will request certain written representations from you about the financial statements and matters related thereto.
- 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).
- Below are the critical elements that should be incorporated into every bookkeeper engagement letter.
- The letter spells out the expectations, timeframes, and scope of work included so all parties are on the same page.
- It is essential to renew your engagement letters regularly, preferably annually.
It leaves a bad taste in everyone’s mouth, whether you’re the client who feels like they’re being overcharged or the bookkeeper who feels like they’re being cheated out of well-earned compensation. 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. The client will have their private information, financial, and other records safeguarded by the terms in the letter.
Accountant Licenses
The annual review will be completed within 6 weeks of receiving your financial information. The quarterly services will be completed by the last day of the month following the end of the quarter. The elements in this section are to help you establish healthy boundaries. When you define everything at the outset, everyone can get on the same page regarding the engagement.
If several people are using the same credentials, you can’t hold a specific individual responsible. The letter needs to write out the duties and responsibilities of the client as they relate to the work expected of the bookkeeper. Have a good discussion about how you want every task done and how the workflow will proceed. 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 accounting engagement letter should not only outline your responsibilities but the responsibilities of your client. For example, you may need certain bookkeeping or financial records from the client by a set time of the month in order to complete your tasks on time. 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. In conclusion, letters of engagement for bookkeepers serve as an essential tool for setting the right expectations and forging a successful working relationship with clients. By meticulously detailing the scope of services, fees, timelines, and responsibilities, bookkeepers can ensure that both parties have a clear and mutual understanding of their professional relationship.
What Is A Bookkeeping Engagement Letter? W/ Free Templates
In addition to outlining services, your engagement letter should include payment terms. This will let your clients know exactly how much they will pay for your services. This section of the engagement letter is significant and clearly defines what you will deliver and what work is not included. This will help mitigate scope creep, which is when the deliverables of a project expand from what was initially set – without allocating additional time or money. To add to the objective, it is crucial to be specific in this section of the letter, so there are no misunderstandings between you and your clients. This is where you outline what you will and will not do as part of the bookkeeping services you’re providing.
A bookkeeping engagement letter is a formal agreement between a bookkeeper and a client. It outlines the expectations, services, and terms of the relationship. The bookkeeping engagement letter should be reviewed and signed by both parties before any work begins. This document serves as a binding contract and can be used in the event of any disputes.
Scope of services
An engagement letter in the world of bookkeeping is more than just a formality — it’s the compass that guides the journey of collaboration between a bookkeeper and their client. Imagine it as the roadmap that navigates through the landscape of expectations, roles, and responsibilities, ensuring both parties are aligned on the same path. The names and addresses of the accountant/bookkeeper and the client will be listed in the letter. If the hired party is an accountancy firm, the name of the accountant or bookkeeper working on the contract will also be provided.
With any client relationship, there’s a chance the situation might go sour. If the engagement doesn’t work out or one party’s expectations are not met, it’s possible you will need liability protection. Having an engagement letter in place outlining your obligations can help protect you in the event a client tries to sue you for nonperformance, assuming you fulfilled your responsibilities. For long-term engagements, you should update the engagement letter each year to ensure the terms are still correct and the included services cover the entire scope of the client’s requests.
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. List the services your firm will provide and how often you’ll provide them. Be specific as possible such as how many bank and credit card accounts will be reconciled each month. If you perform one-time services, like a cleanup, specify what the completed job looks like. Engagement letters should be used by any accountant performing client work to protect themselves and establish a good business relationship based on transparency. Creating your accounting engagement letter can take a bit of work.
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. An effectively written engagement letter is not just a contractual agreement; it’s a testament to a professional relationship built on trust, clarity, and mutual respect. Your responsibility for this engagement includes providing access to your accounting system and providing the documentation and information necessary to complete the quarterly compilation services and the annual review.