How to Write an Accounting Engagement Letter + 5 Free Templates

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bookkeeping engagement letter

This can help avoid any confusion or misunderstandings down the road. Engagement letters set clear expectations, minimize accounting basics risk and ensure both parties remain accountable. Having an engagement letter that’s clear and comprehensive is therefore essential before providing your services — and this is where templates come in handy. This way, you can avoid confusion about what’s included and what additional services might incur extra fees. With any client relationship, there’s a chance the situation might go sour.

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. Then, outline the bookkeeping services to be provided, the payments to be made and the due dates for those payments.

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bookkeeping engagement letter

This type of engagement is distinctly different from regular bookkeeping services. It focuses on helping a client get up to speed when they have neglected their bookkeeping for several months. It should also outline the limitations of liability for both parties. For example, you can detail the client’s responsibility for providing accurate information and the bookkeeper’s liability for errors or omissions. We recommend that you consult with a lawyer to make sure that you use appropriate language. This letter is to confirm our mutual understanding of the step by step guide on discounted cash flow valuation model terms of our engagement to provide accounting and review services for your firm.

Why your accounting firm needs engagement letters for every client

It outlines a clear path to address what to do if parts of the agreement aren’t being upheld. It tells them exactly what they’re paying for, giving them the right to question your services if there are needs not being met. Not only does it protect the interests of your firm and your clients, it also ensures clarity across every aspect of the engagement.

The purpose of a bookkeeping engagement letter is to outline the terms and conditions of the professional relationship — so there are several key components it must include.
E-signatures are legally binding and offer a faster, safer way to sign important documents.
This won’t just set clear expectations from the outset; it can also save you time and money.
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It’s important to consult a lawyer for legal advice when writing these letters to address the nuances of different industries or client needs.
It will promote a smooth professional relationship, with clear terms and conditions to guide both parties.

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 how to record a loan to your business in bookkeeping the opportunity to walk away while knowing the full picture.

Renewing annually gives you a chance to review your prices and if the scope needs to change. If additional services are required, this gives you a chance to allocate the proper amount of time and adjust your fees accordingly. At Financial Cents, we understand the importance of a first impression, and we’re here to help. Our FREE bookkeeping engagement letter template will help you craft a professional accounting engagement letter that impresses your clients instead of confusing them. To ensure clarity at the time of signing and throughout the professional relationship, a bookkeeping engagement letter should be thorough, detailed and clear.

Rather than start from scratch, you can download the Accounting Engagement Letter template from the Karbon Template Library. Failure to provide the required information may result in delays or additional fees. Late payments will incur a fee of $X for each number days past the due date. If you are covering the cost of the software package, be sure to outline how much of the monthly fee is covering that. You may also want to give a quick company overview to showcase your value and explain the point of the engagement letter. Briefly identify the firm, yourself and your position and correctly identify who will receive your services, whether that is an individual or a business.

Free bookkeeping engagement letter template

The letter is a commitment to professionalism and a formalization of the standards that you hold yourself to. It’s a promise to honor deadlines, conduct business professionally, and hold your client’s best interests at heart. 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 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. It is also crucial for the client to know what happens when they do not fulfill their obligations promptly.

Free Bookkeeping Engagement Letter Template

Who handles the accuracy of any information provided to complete the accounting engagement? Is the scope limited to a compilation service or is the client looking for a full audit? 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.