You should have a conversation about the specific bookkeeping tasks you require and how often you need reports generated. Talk about what level of detail you expect in these reports, and other similar details. A good bookkeeping engagement letter will help you clarify the tasks you’re hiring for. This way, you will not easily get into any confusion with your bookkeeper. If you’re reading this far, you likely have an idea about what each component of the contents of engagement letters, as a legally binding document, usually have.
Done right, such a letter ensures a great customer experience, minimizes the risk of misunderstandings arising — and protects your firm from potential liability. An engagement letter in accounting is a legally binding contract between you and a client. It outlines your relationship and defines crucial details, such as fees, scope of services and responsibilities.
A solution to this is providing your clients with the option to e-sign your engagement letter. E-signatures are legally binding and offer a faster, safer way to sign important documents. This professional template offers an organized layout and a list of industry-standard terms and conditions.
Use “you” instead of “the client” or “the recipient” when addressing your client. Aim for a natural, friendly tone, like you would if you were talking face-to-face with your client. Get to the point quickly, don’t let them drown in paragraphs of unnecessary information. For instance, there may be five types of budgets in managerial accounting situations where confidentiality is overridden, such as legal requirements to report fraud or comply with court orders.
How to streamline payroll with a workflow checklist and template
If you offer your bookkeeping services under your business name, use that. Engagement letters specify the terms and conditions of the relationship, whereas contracts may include additional legal conditions. However, an engagement letter can serve as a legally binding contract.
Explore the Template Library
- Also, sending documents back and forth via mail or courier and maintaining secure storage for physical documents adds significant time and expense to the entire process.
- The bookkeeping engagement letter will clarify the responsibilities of each party, set clear expectations, and make sure you’re protected if things don’t go to plan.
- 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.
- This not only eliminates time-consuming steps but also reduces paper waste, speeds up the onboarding process for new clients, and offers convenience.
Confidential information could include financial records, tax returns, business plans, and any other information deemed sensitive by the client. Before writing your accounting engagement letter, it is important to know the basic elements that are commonly found in them and avoid mistakes that might jeopardize your relationship. Sure, you’ve landed the perfect new accounting client – congratulations. But before celebrating with a high five, remember a proverbial handshake isn’t enough to ensure a long-term partnership with your new client. To truly set the stage for success, you need an accounting engagement letter. Make sure you are on the same page about your needs and expectations before drafting an engagement letter.
Download Template
For the sake of stability, it is important to list the services you provide and how much these will cost — upfront. To combat this, many have turned to technology to expedite the electronic signing of documents. While the act of physically signing an engagement letter held a certain weight and formality in the past, it’s become increasingly cumbersome and inefficient for both clients and firms.
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. 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.
It’s a promise to honor deadlines, conduct business professionally, and hold your client’s best interests at heart. Not only does it protect the interests of your firm and your clients, it also ensures clarity across every aspect of the engagement. To use the template, follow the link and download the document as a Microsoft Word file. You can then edit the template as needed before sending it to your clients as a PDF document. Failure to provide the required information may result in delays or additional fees. Outline what information the client should provide and which tasks they are responsible for, including deadlines where applicable.