As a legal document, it is important that the client provides confirmation of the terms outlined in the engagement letter and both parties sign and date the agreement prior to the engagement. Dear Mr. Jones,This letter confirms the services provided by ABC Accounting to Jones Co. and it outlines the terms, nature, and extent of the professional services we will be providing. ABC Accounting has been in business for over 20 years and we have always put our clients first, taking time to understand them and their businesses and offering high-quality financial services because of that. This section defines the boundaries of the engagement and helps prevent scope creep. Engagement letters are not only a legal requirement but also a cornerstone of transparency and mutual understanding in the accounting and finance industry.
Ignition automates the contract and payment steps, while Content Snare automates the gathering of client information and documentation. There may be longer-term projects for which the engagement letter is effective. It is recommended to review and update the engagement letter at least annually for any changes. Outline what the engagement is and when it will begin and end as well as expected delivery dates of the work performed. This can be simply stating the date range of the engagement, or you can include a detailed link of deadlines for both you and your client to keep the project on track. In fact, the guidance recommends that accountants send a new engagement letter whenever the scope of work changes, or annually at a minimum.
Outline responsibilities for both you and your client:
Clients are required to arrange for reasonable access by us to appropriate individuals and documents, and shall be responsible for both the completeness and accuracy of the information supplied to us. An engagement letter ensures that both you and your client understand what work will be delivered when and how payment works. Before we dive into real estate accounting what exactly an engagement letter is and why you need one, you should know that these letters should be written for any type of service engagement an accountant might have with a client. Senior Manager and CPA with over 20 years of experience in accounting and financial services, specializing in risk management and regulatory compliance.
- Renewing annually gives you a chance to review your prices and if the scope needs to change.
- If you are using a sample bookkeeping engagement letter template, do not forget to add in any missing sections.
- For the bookkeeper, it provides a documented understanding of the scope of the work, serving as a bulwark against any potential misunderstanding or conflict.
If your engagement letter plainly outlines this information, it helps remove potential confusion and forgetfulness, saving you time, stress, and potentially from an upset client. Accountants and bookkeepers are often required to have a signed engagement letter by all their clients before they can begin work as required by their professional liability insurance. A bookkeeping engagement letter sets the tone and scope of the bookkeeping project.
Compensation and Payment Terms
The fee excludes miscellaneous expenses which are incurred to complete the engagement. If you’re looking for simple workflow templates, which includes a bookkeeping client onboarding checklist, access our collection of 32 customizable accounting workflow templates and checklists here. 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. Before you provide any services to a client, you and your client must agree on the terms of your engagement.
Engagement Letter Signed – What Next?
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. The primary purpose of a bookkeeping engagement letter is to clearly state the expectations of your agreement.
Engagement for QuickBooks Services (Letter Templates)*
This document ensures everyone is on the same page with what is expected and protected from potential future disputes. It’s a win-win for everyone involved and a crucial part of onboarding. Engagement letters should be used by any accountant performing client work to protect themselves and establish a good business relationship based on transparency.
Outline what information the client should provide and which tasks they are responsible for, including deadlines where applicable. It is also crucial for the client to know what happens when they do not fulfill their obligations promptly. 1) A client’s first impression of your business can make or break a deal. 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.
It’s possible you will end up having several agreements in effect for a single client. Start by clearly stating that this is a bookkeeping engagement letter. Include the names and addresses of both parties, as well as the date of the agreement.