"Accounting Engagement Letter Template"

An Accounting Engagement Letter is a statement prepared by the accounting firm or a private accountant and sent to the client to showcase the services they are able to provide and set expectations for the upcoming working relationship with the client whether the latter needs to file tax documentation or commissions audit services.

Alternate Name:

  • Accounting Services Engagement Letter.

Once the customer finds the accountant that suits the current needs of their business, they can decide which services are required for the company and determine their price using a letter of engagement. If this document lists all the essential terms of the business relationship between the organization and the accounting firm and is signed by both parties, it works as a legally binding contract recognized by all third parties, including courts and other authorities. An Accounting Engagement Letter template can be downloaded below.

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How to Write an Accounting Engagement Letter?

Here is how you can draft an Engagement Letter for Accounting Services:

  1. Identify the parties by their names and legal addresses. If one of the counterparts is an accounting firm, you can state the name of the accountant responsible for the business relationship straight away.
  2. Describe the accounting services to be provided. Whether you need to keep your company on track following different payments and loans, monitor the financial development of your business, or manage expenses better to improve the financial standing of the entity, you need to outline the scope of work you are prepared to perform for the client - traditional bookkeeping, tax filing, auditing, looking for discrepancies in financial records, etc. In case the customer asks you to provide services you did not mention in the letter, you will be able to refer them to this document and avoid confusion and disputes.
  3. Record the duration of the engagement - you can make it definite or indefinite, depending on the project in question. It is a good idea to agree upon a short-term contract and then extend it, probably on new terms the parties come up with weeks or months later.
  4. Negotiate and write down the hourly rate of accounting services. Alternatively, you can enter the sum of money you will charge for the project at hand if you had a chance to get a closer look at it or request the customer to pay you a retainer - a fixed amount of money that will cover the first weeks of work. Include a payment schedule and establish late fees and penalties for both parties in case either breaches the conditions listed in the letter.
  5. Sign the letter once both parties have had a chance to scan through the document and approve it. This will minimize the risks for both the client and the accountant. If you believe the services in question require additional protection, you can obtain a notary seal for the letter; however, this is optional and the document will be considered enforceable even if the parties do not go to the notary public.

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Accounting Engagement Letter
From: ___________________________
To:______________________________
Sender’s Name
Recipient's Name
_________________________________
_________________________________
_________________________________
_________________________________
Sender’s Address
Recipient's Address
_________________________________
_________________________________
City, State, ZIP Code
City, State, ZIP Code
_________________________________
Date
Dear ____________________________,
Recipient's Name
1. The Parties. This Accountant Engagement Letter (hereinafter referred to as the
“Letter”) confirms the services of ________________ (hereinafter referred to as the
“Accountant”) requested and hired by ________________ (hereinafter referred to as the
“Client”) as an independent contractor. The Accountant and Client, collectively referred
to as the “Parties,” hereby agree to the following terms and conditions:
2. Services. The Accountant agrees to provide the following services (check all that
apply):
Accounts payable.
Accounts receivable.
Audit.
Bank reconciliation.
Bill payment.
Budget preparation.
Customized reports.
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Accounting Engagement Letter
From: ___________________________
To:______________________________
Sender’s Name
Recipient's Name
_________________________________
_________________________________
_________________________________
_________________________________
Sender’s Address
Recipient's Address
_________________________________
_________________________________
City, State, ZIP Code
City, State, ZIP Code
_________________________________
Date
Dear ____________________________,
Recipient's Name
1. The Parties. This Accountant Engagement Letter (hereinafter referred to as the
“Letter”) confirms the services of ________________ (hereinafter referred to as the
“Accountant”) requested and hired by ________________ (hereinafter referred to as the
“Client”) as an independent contractor. The Accountant and Client, collectively referred
to as the “Parties,” hereby agree to the following terms and conditions:
2. Services. The Accountant agrees to provide the following services (check all that
apply):
Accounts payable.
Accounts receivable.
Audit.
Bank reconciliation.
Bill payment.
Budget preparation.
Customized reports.
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Detailed general ledgers.
Financial statements.
General bookkeeping.
Payroll and check registers.
Tax calculation and filing.
Other: ____________________________________________________________.
The aforementioned selections shall be referred to as the “Services”. The Accountant
shall conduct the Services within the specifications and guidelines set by the Client. The
Accountant shall, at all times, observe and comply with generally accepted bookkeeping
and accounting practices and standards while complying with all Federal and State laws,
regulations, and procedures when completing their Services in accordance with this
Letter.
3. Fees. The Client agrees to pay the Accountant (check one):
$________________ per hour for providing the Services.
A fixed amount of $________________ as the total payment for the Services.
Other: ____________________________________________________________.
4. Payment. The Client shall pay the Accountant (check one):
A recurring payment paid ____________________________________________.
Weekly, Bi-weekly, Monthly, Quarterly, Yearly
Upon completion of the Services to the Client.
Other: ____________________________________________________________.
5. Expenses. The Client shall (check one):
Pay expenses. In addition to the Fees provided in Section 3, the Client agrees to
reimburse the Accountant for any out-of-pocket expenses incurred that include,
but are not limited to, travel expenses, audit fees, tax fees, and postage.
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Not pay expenses. All expenses, including, but not limited to, travel expenses,
audit fees, tax fees, and postage shall be the responsibility of the Accountant.
6. Retainer. The Client shall (check one):
Pay a retainer. In the amount of $________________ that shall act as an advanced
payment on the Services provided by the Accountant.
Not pay a retainer.
7. Term. The Term of this Letter shall be (check one):
Fixed time-period. Starting ________________ and ending ________________.
Ongoing period. The arrangement of the Services provided by the Accountant
shall be on-going beginning on ________________.
Other: ____________________________________________________________.
8. Termination. This Letter may be (check one):
Terminated by both Parties, by providing the other party at least ____ days’
written notice.
Terminated by the Client only, by providing the Accountant ____ days’ written
notice.
Terminated by the Accountant only, by providing the Client ____ days’ written
notice.
Unless the Accountant has not performed the Services in accordance with this Letter, the
Client shall pay the Accountant, in full, for any remaining balance owed following the
termination of Services.
9. Client’s Obligations. The Client shall be solely responsible for providing the
Accountant all financial information related to their personal and/or business affairs
including, but not limited to, all materials, data, and documents necessary to perform the
Services under this Letter. The Client acknowledges and agrees that the accuracy of
financial information supplied to the Accountant is the sole responsibility of the Client
and the Accountant shall be held harmless from any liability resulting from the accuracy
of the financial information provided.
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10. Employment Status. The Parties agree that the Accountant shall provide the Services
to the Client as an independent contractor and shall not be acting or determined to be an
employee, agent, or broker. As an independent contractor, the Accountant shall be
required to follow all requirements in accordance with the Internal Revenue Code which
includes, and is not limited to, payment of all taxes levied for fees collected by the Client
for payment of their employees, agents, brokers, and subcontractors. The Accountant
understands that the Client shall in no way withhold any amounts for payment of any
taxes from the Accountant’s accumulated fees for Services.
11. Confidentiality. The Accountant, shall in the course of performing the Services
hereunder, may gain access to certain confidential or proprietary information of the
Client. Such “Confidential Information” shall include all information concerning the
business, affairs, products, marketing, systems, technology, customers, end-users,
financial affairs, accounting, statistical data, documents, discussion, or other information
developed by the Accountant hereunder and any other proprietary and trade secret
information of the Client whether in oral, graphic, electronic or machine-readable form.
The Accountant agrees to hold all such Confidential Information of the Client in strict
confidence and shall not, without the express prior written permission of the client,
disclose such Confidential Information to third (3rd) parties or use such Confidential
Information for any purposes whatsoever, other than the performance of its obligations
hereunder. The obligations under this section shall survive the termination or expiration
of this Letter.
12. Assignment. The Accountant 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 to assign,
transfer, or subcontract any rights, duties, or obligations arising hereunder shall be void
and of no effect.
13. Notices. Any notices, bills, invoices, or reports required by this Letter shall be
deemed received on the day of delivery if delivered by hand, standard mail, e-mail, or
facsimile during the receiving party’s regular business hours.
14. Governing Law. This Letter shall be construed in accordance with and governed by
Federal laws and those located in the State of ________________.
15. Dispute Resolution. All disputes under this Letter shall be settled by arbitration in
the State of governing law before a single arbitrator pursuant to the commercial law rules
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of the American Arbitration Association. The arbitration may be commenced at any time
by any party hereto giving written notice to the other party to a dispute that such dispute
has been referred to arbitration. Any award rendered by the arbitrator shall be conclusive
and binding upon the parties hereto. This provision for arbitration shall be specifically
enforceable by the parties and the decision of the arbitrator in accordance herewith shall
be final and binding without right of appeal.
16. Severability. If any provision of this Letter shall be held to be illegal, invalid, or
unenforceable under present or future laws, such provisions shall be severable, this Letter
shall be construed and enforced as if such illegal, invalid or unenforceable provision had
never comprised a part of this Letter; and, the remaining provisions of this Letter shall
remain in full force and effect.
17. Limitation of Liability. In no event shall either party be liable to the other party for
any indirect, incidental, consequential, special, or exemplary damages, including without
limitation, business interruption, loss of or unauthorized access to information, damages
for loss of profits, incurred by the other party arising out of the services provided under
this Letter, even if such party has been advised of the possibility of such damages. In no
event will neither party’s liability on any claim, loss, or liability arising out of or
connected with this Letter shall exceed the amounts paid to the Accountant during the
period immediately preceding the event giving rise to such claim or action by the Client
or the limits of the Accountant’s professional liability policy, whichever is greater of the
errors and omissions policy that is in place.
18. Indemnification. Each party shall at its own expense indemnify and hold harmless,
and at the other party’s request defend such party affiliates, subsidiaries, and assigns its
respective officers, directors, employees, sublicensees, and agents from and against any
and all claims, losses, liabilities, damages, demand, settlements, loss, expenses, and costs,
including attorneys’ fees and court costs, which arise directly or indirectly out of or
related to any breach of this Letter or the gross negligence or willful misconduct of a
party’s employees or agents.
19. Entire Letter. This Letter is the final, complete, and exclusive agreement of the
parties with respect to the subject matter hereof and supersedes and merges all prior or
contemporaneous representations, discussions, proposals, negotiations, conditions,
communications, and agreements, whether written or oral, between the parties relating to
the subject matter hereof and all past courses of dealing or industry custom. No
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