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How often should we review and update an engagement letter?
If you offer your bookkeeping services under your business name, use that. Engagement letters are important because they outline the expectations and responsibilities of both the bookkeeper and the client. They also help protect both parties in case of any disputes or misunderstandings, especially involving the scope of work to be completed.
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. 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.
- The goal for any engagement letter is to be clear, concise, and professional.
- Knowing your bookkeeping is in good hands is an important step in ensuring the success of your business.
- Templates aren’t limited to engagement letters and onboarding, either.
- The essence of this letter isn’t to impress your client with your accounting knowledge or verbose grammar.
Limitations of liability
Compensation can be based on milestones, regular retainers, or hourly rates. The final structure of the compensation will be the result of a negotiation between the bookkeeper and the client. With TaxDome, you can choose from a broad range of templates created for bookkeeping, tax preparation and more. TaxDome also offers time-saving features — such as autofill via shortcodes, automated document sending and e-signature requests — streamlining the entire process from start to finish. Wet signatures are time-consuming and make it difficult for your clients to sign your engagement letter, as it typically gives them no choice but to print, sign and scan the document. If you no longer offer a specific service, for example, it’s worth updating your engagement letter to reflect that and improve the overall clarity of the work you’re providing.
Services
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. This agreement is between Your Business Name (“Bookkeeper”) and Client’s Business Name (“Client”). Our services will begin on Start Date and are expected to continue until End Date or us gaap versus ifrs until terminated by either party as outlined below. Outline what information the client should provide and which tasks they are responsible for, including deadlines where applicable.
This ensures that both parties are still in alignment with the work agreed upon. This engagement is very specific to tax season and tax documentation. In fact, most businesses engage accountants, not bookkeepers, to help with taxes. Make sure the reasons and process for legal termination by either party is clear. Begin with a clear opening statement that explains the purpose of the document – i.e., this is an engagement letter outlining the terms of service between client and bookkeeper. A cloud-based solution that makes it easy for accounting firms to manage client work, collaborate with staff, and hit their deadlines.
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. Engagement TerminationThis agreement may be terminated by either party with number days’ written notice. In the event of termination, any outstanding fees for services rendered will be due immediately. We will return all client documents and assist in the transition to a new bookkeeper as necessary. Thank you for choosing Your Business Name to provide bookkeeping services. This engagement letter outlines the terms of our agreement and the services we will provide.
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. As an accountant, having an engagement letter helps you determine how much of your resources to allocate to the project and calculate the profitability of each engagement. You can also add what will happen if the client requests extra services outside the scope of the current engagement.
Join the thousands bookkeepers using our collection of accounting workflow templates. A proper engagement letter will outline when the client will be billed, payment terms, and even how much additional services will cost. The cost for additional services (since you won’t know what they are until you’re asked to do them) are often billed at normal hourly rates. Accounting engagement letters should include terms which limit the firm’s liability as much as possible. In addition, it’s wise to include resolution terms such as requiring use of mediation to resolve any future disputes with the client.
Knowing who is responsible for providing and processing information gets everyone to be on the same page and creates a smoother workflow. Both parties need to be on the same page as far as the scope of the project and which services are included in the pricing. Clearly outlining would you please explain unearned income these items at the beginning means the discussions about the project and price have happened before you have invested any of your team’s time in the engagement.