Bookkeeping Engagement Letter Template

Fully editable with standard terms and clauses. Send and e-sign it online.

Bonsai has helped create 1,023,928 documents and counting.

Trusted by thousands of agencies and consulting firms
4.8/5 on Capterra
4.8/5 on G2
Successful agencies, consulting and professional services firms rely on Bonsai every day to run their business.
Table of contents

An engagement letter is a contract between a client and the service provider. It defines and clarifies the scope of the services, payment regulations, duration, and other important terms & conditions for both parties. A bookkeeping engagement letter, or an accounting engagement letter, also works the same way.

Contract-based services require a proper structure for all the parties to have complete knowledge about the given project. If there aren’t defined services, goals, payment methods, etc., there can be conflicts and miscommunication. When the participating parties don’t see eye-to-eye, things can become problematic. An accounting engagement letter mitigates these issues.

Given below is a complete guide on a bookkeeping engagement letter template, understanding its importance, and tips on drafting one:

Ii. What Is A Bookkeeping Engagement Letter?

Before beginning a professional relationship with anyone, it is pivotal to draft a bookkeeping engagement letter that all the parties agree upon. It defines the roles of the participants. Once both parties agree on the engagement letter, it streamlines a lot of things.

A. Definition Of A Bookkeeping Engagement Letter

A bookkeeping engagement letter is like a contract or agreement between a bookkeeper and the hiring party. The letter will contain the scope of work expected of them. It will define their role and the skills required of them.

It covers the timeline in which the project is expected to be completed. There can be milestones (goals) for them to achieve in a fixed timeframe. There will be clearly defined costs for the services offered by the bookkeeper. It could also cover the payment method. There will be accurate information on how the payment will proceed, who will proceed with it and through which medium.

The engagement letter also covers any scope of additional work an accountant or bookkeeper might have to conduct. As financials are private for an enterprise (hiring party), the engagement letter can also work as a non-disclosure or a contract to ensure privacy and safety. It ensures that the bookkeepers are bound to their duty.

Overall, a bookkeeping engagement letter establishes communication and eliminates any doubts regarding the work and responsibilities of both parties.

B. Purpose Of A Bookkeeping Engagement Letter

Usually, people hire an accountant when they need tax filing or financial audits. A bookkeeper is needed to keep track of the financials. Some may hire a long-term accountant to work with them. There are different types of accounting and bookkeepers. Their role or department can easily be any of the following:

  1. Tax
  2. Audit
  3. Finance
  4. Project
  5. Staff
  6. Forensic
  7. Investment
  8. Cost
  9. Management
  10. Government

The purpose of the bookkeeping engagement letter is to give the accountant or bookkeeper proper instructions on their role and duties. It will tell them which of the above-given services or roles they are expected to fulfill. An accounting engagement letter is a legally-bounding document. A bookkeeping or an accounting engagement letter is less formal than an actual contract, but it can be used legally if the situation shall arise.

C. Who Uses A Bookkeeping Engagement Letter?

Both sides may offer an engagement letter that the other party can go through. The hiring party can use it to ensure that the bookkeeper or an accountant will fulfil the duties and be responsible. Correlatively, the bookkeeper will create a defined boundary, or scope of work, without letting the hiring party slip any additional services (for free). They can also make sure that they will get paid on time.

Almost anyone can use a bookkeeping or accounting engagement letter to hire a professional. Whether you’re an individual person looking for better financial management and services, or a full-fledged enterprise, you can use the letter. It is not an impolite gesture but an appreciative effort to streamline the entire course of services.

D. Key Components Of A Bookkeeping Engagement Letter

A bookkeeping engagement letter will need the name and details of both parties (the client and the bookkeeper). It will also need the signature or authentication of the agreement at the bottom.

The letter doesn’t have to be extensive and full of nitty-gritty details. There can be two letters, one offered by the hiring party and another by the bookkeeper. In such cases, it is important for the letters to not nullify or void any point in the other one.

It will have a clear mention of time, services or job profile, and payment circulation. With these components, an engagement letter will be ideal.

Benefits Of Using A Bookkeeping Engagement Letter

An accounting engagement letter is a legally bounding document that can solve a lot of problems and empower both sides. Other benefits include:

A. Protection For The Client And The Bookkeeper

The client will have their private information, financial, and other records safeguarded by the terms in the letter.

If either side doesn’t hold their end of the deal, legal actions can be taken. It also prevents any exploitation.

The bookkeeper also receives security that their work and efforts won’t go to waste, and they will be compensated according to what’s mentioned in the letter.

B. Clarification Of Responsibilities And Expectations

Often, the client thinks that they don’t have any duties to fulfill. Who will provide the financial records and help the bookkeeper or accounting compile, maintain, or access all the information? The letter will define these.

A bookkeeper will also know if there can be additional queries or advice the client may ask. Often, breaching the boundary, or ‘service creeping,’ starts small. It could be a single favor or a simple question. But over time, it can make a big difference.

C. Mitigation Of Misunderstandings And Disputes

Once you start working with someone, it becomes challenging to define boundaries. This goes for almost any job, business, or partnership. The same applies to hiring a bookkeeper or accounting service. Often, it is worse because they won’t know about the other’s flexibility in work.

For instance, a bookkeeper might not know how compliant and resourceful the client will be. The client might not know if the bookkeeper or accounting will toss in a few necessary services.

An accounting engagement letter eliminates any guesswork. It doesn’t simply work on expectations or assumptions. Hence, both parties will have clear information.

D. Professionalism And Credibility

Working with a letter of engagement enhances the credibility of the business and the professional. It shows a clear distinction between individuals who understand how to conduct business and rookies.

An individual who wants to keep things professional and sorted will always use a letter of engagement to ensure efficacy.

How To Draft A Bookkeeping Engagement Letter

A. Tips For Drafting An Effective Bookkeeping Engagement Letter

If you’re hiring an accounting staff or bookkeeper, make sure to ask about all the services they will offer. Enquire about the possibility of any other services you might need or if there are some hidden costs for any extra service. Get details as much as possible.

For an accountant/bookkeeper, understanding the client is essential. If you can gauge their communication skills and how much they care about the project, it can help you draft an effective engagement letter. Often, clients just hire and forget, don’t want to participate or delay the resources because they don’t know their role in the project. So, make sure to clarify these aspects.

After that, you can:

  • Make sure to discuss the engagement letter before you agree to work together. Sending an engagement letter without mentioning it during the meeting or hiring process may seem rude or offensive.
  • Most letters of engagement lack subject lines. Make sure to include it in yours.
  • You can keep it short and sweet if it is short-term work. For long-term projects, consider being more detail-oriented in drafting.
  • Divide the letter into information (date, name, etc.), an introduction that informs the other party that it is an engagement letter, then the terms and conditions, and end the letter with a statement of acknowledgement.
  • The letter will also have the field clearly indicated for the signature/authentication.
  • Try to use professional writing and formal language to define everything in the letter.
  • Both parties can exchange their letter of engagement or sit together to write one. It can make things easier.
  • Both parties should keep a signed copy of the engagement letter.

B. Key Elements To Include In The Letter

What should an engagement letter for bookkeeping or accounting contain? It should cover and state the following:

  • Identification: The letter should clearly identify the client and the bookkeeper.
  • Services: The job role and other services that the bookkeeper will offer.
  • Client's Role: Everything expected of the hiring party (client) to provide to the bookkeeper.
  • Time: Period of engagement, working hours, and the duration of the project. Mentioning the date will be necessary, too.
  • Milestones: The project can define weekly, monthly, or quarterly parameters or goals.
  • Expiration / Termination: Make sure to add the time or date regarding when the services will end. Include any other clauses for potential termination or withdrawal from the services.
  • Fee Structure: Hourly rates or flat rates with other rates like the cost for addition, reviews or services provided during non-working hours.
  • Authentication: Acknowledgement of the letter of engagement and signature from both sides. There could be additional authentication, like stamps, to reinforce the authenticity.

These are all essential components needed in the letter of engagement. Without these, it isn’t a valid or effective accounting engagement letter.

Sample Bookkeeping Engagement Letter Template

Your sample for the accounting engagement letter is ready for you to use. Sign up for a free 7-day trial and get access to your easy-to-customize sample engagement letter. The template will help you cover all the necessary fields and ensure that you have complete information.


Overall, a bookkeeping engagement letter makes a significant difference in an efficient workflow. It maintains a favorable relationship between the bookkeeper and the client. As it also eliminates miscommunication and assumption, the entire process becomes easy. An engagement letter is a soft addition for anyone looking to improve their professional approach, increase credibility, and have legally binding documents.

However, it is understandable if you’re having trouble writing the proper accounting engagement letter. You can use the sample template to get used to the process. Once you become an expert, you can easily write your custom engagement letters.

Learning is a process, but we are here to make things easier. If you want to save time, Bonsai brings you a free 7-day trial. All you need to do is signup and get your free copy of the bookkeeping engagement letter. You can use the trial membership for other writing samples or letter preparations, as well.

Frequently Asked Questions
Questions about this template.

Template preview

Bookkeeping Engagement Letter Template

Bookkeeping Engagement Letter

First Name
Last Name
Acme LLC.
First Name
Last Name
Corporation Corp.

THIS BOOKKEEPING SERVICES LETTER (the "Agreement") is made effective as of June 9, 2023 (the "Effective Date"), by and between: (1) Cool Company (hereinafter "Company"), located at [ENTER COMPANY ADDRESS] and (2) Sample Client (hereinafter "Client"), located at [ENTER CLIENT ADDRESS] (collectively referred to herein as the "Parties", and individually as a "Party"). The Parties agree to the following terms of services.

  1. Company shall provide the following services to Client: [ENTER APPLICABLE SERVICES DESCRIPTION].

    Company will make no attempt to adjust the records to reflect Generally Accepted Accounting Principles ("GAAP") nor to reflect proper tax record keeping. Company will make no audit or other verification of the data Client submits. Company will not perform any compilation, review or audit of any of the financial information. To perform the Services, Company will need to obtain information on a timely and periodic basis from Client. These items include, but are not limited to, all the input, such as trial balances, general ledgers, bank statements, and any other information or documentation that we may require to complete the work of this engagement. These items and any other items that Company obtains from Client will be based on information provided by Client and will be used with limited to no verification or investigation. Client's cooperation is an integral part of completing this engagement and Client agrees to provide resources and personnel with the appropriate knowledge to assist Company in completing this engagement. Client may request that Company perform additional services at a future date not contemplated by this Agreement. If this occurs, Company will communicate with Client regarding the scope and estimated cost of these additional services. Engagements for additional services will necessitate that the Parties sign a separate written agreement to reflect the obligations of both Parties. The following activities are considered outside the scope of this Agreement: (a) recording activities into QuickBooks, including journal entries, receipts, payments, generating invoices, performing bank reconciliations, (b) review and analysis of real estate software products, (c) discussion of accounting processes and procedures and/or (d) review of legal agreements.

  2. This Agreement will begin on the Effective Date written above, and shall continue until [END DATE OR "until the work is completed"]. Company and Client may extend the term of this Agreement upon the mutual written consent of the Parties hereto. The Parties agree that the terms of this Agreement, including the Services and compensation provided herein, may get amended if this Agreement is extended beyond the term of this Agreement.

  3. Client shall compensate Company for the Services as follows: the total services fee (not including any additional and/or out-of-pocket expenses) is [PAYMENT RATE] (the "Total Services Fee"). Client shall pay 50% of the Total Services Fee as of the Effective Date of this Agreement and the remaining 50% of the Total Services Fee when invoiced by Company to Client upon the completion of the Services (to be determined in Company's discretion). Client shall pay all invoices within [X DAYS TO PAY] of receipt from Company. In the event Client fails to pay any portion of an invoice when due, a late payment penalty of [LATE FEE PERCENTAGE]% will be assessed for every month such payment is delayed. Invoices may be paid online or other methods of payment included on invoices. Client will reimburse Company for all reasonable expenses incurred by Company in performing the Services pursuant to this Agreement, only if Company receives written consent via email from an authorized representative of Client prior to incurring such expenses and submits receipts for such expenses to Client.

  4. Company retains all ownership rights to any materials provided to Client during the term of this Agreement. The materials Client is provided by Company are for Client's use only and are being provided to Client with a single-user license. Client is not authorized to share, copy, distribute, or otherwise disseminate any materials received from Company electronically or otherwise without Company's prior written consent. All such intellectual property shall remain the sole property of Company, and no license to sell or distribute Company's materials is hereby granted or implied. Client agrees not to reproduce, duplicate, copy, sell, trade, resell and/or exploit for any commercial or personal purposes any materials provided by Company to Client without Company's prior written consent.

  5. Client acknowledges that Client takes full responsibility for the Client's decisions made before, during and after the Services provided by Company. All information and the Services provided to Client are made available to Client as business tools for Client's own use. Client accepts full responsibility for its choices, actions and results, and expressly assumes the risk of the Services for Client's use, or non-use, of the information provided to Client. Client also acknowledges and understands that Client expressly assumes all of the risks related to the Services provided by Company to Client, whether or not such risks were created or exacerbated by Company. Notwithstanding anything to the contrary in this Agreement, Company makes no and disclaims all warranties, express or implied, including the implied warranties of merchantability, fitness for a particular purpose with respect to the Services to the extent permitted by applicable law. Company makes no representations or warranties as to the success of the Services for any purpose or use. In no event shall Company be liable to Client or to any other person for any incidental, consequential or special damages arising from the Services as herein contemplated. Past results are in no way a guarantee of results for any current client of Company. Client hereby disclaims that it is relying upon or has relied upon any representations or warranty not included in this Agreement that may have been made by any person, and acknowledges and agrees that Company disclaims any such other representations and warranties. Client freely and voluntarily assumes all risks involved with receiving the Services described herein. Client further understands and acknowledges that desired or anticipated results may not be achieved, and Client takes full responsibility for Client's results and actions and decisions. Company makes no guarantee, representation or warranty as to the results that Client may attain through the services and consultant explicitly disclaims any warranty or guarantee, express or implied, of results.

  6. Company is an independent contractor with respect to its relationship to Client. Neither Company nor Company's employees are or shall be deemed for any purpose to be employees of Client. Client shall not be responsible to Company, Company's employees, or any governing body for any payroll taxes related to the performance of the Services.

  7. Under no circumstances shall Company be liable to Client or any third party for indirect, incidental, consequential, special or exemplary damages (even if that Party has been advised of the possibility of such damages), arising from the Services herein contemplated or any provision of this Agreement, such as, but not limited to, loss of revenue or anticipated profit or lost business, costs of delay or failure of delivery, or liabilities to third-parties arising from any source. Company's maximum liability hereunder shall be limited to the total amount of fees paid by Client to Company hereunder (not including any monetary amounts transferred by Client to Company to be paid by Company to a third-party on behalf of Client). Client releases and discharges Company and its affiliates, successors and assigns, officers, employees, representatives, partners, agents, subcontractors and anyone claiming through them (collectively, the "Company Parties"), in their individual and/or corporate capacities, from any claims, liabilities, obligations, promises, agreements, disputes, demands, damages, cause of action, tax liability and/or financial liabilities of any kind relating to the services of Company.

  8. Client agrees to defend, indemnify, and hold harmless Consultant and its officers, directors, agents, affiliates, distributors, representatives, and employees from any and all third-party claims, demands, liabilities, costs and expenses, including reasonable attorneys' fees, costs and expenses resulting from Client's material breach of any duty, representation or warranty under this Agreement.

  9. This Agreement is not assignable, in whole or in part, by Client without the prior written consent of Company. Any attempt to make such assignment shall be void.

  10. In any legal action between the Parties concerning this Agreement, the prevailing Party shall be entitled to recover reasonable attorneys' fees and costs.

  11. This Agreement may be terminated by either Party hereto at any time and for any reason provided the Party seeking such termination submits written notice to the other Party thirty (30) days in advance of termination.

  12. If a Party defaults by failing to substantially perform any provision, term or condition of this Agreement (including without limitation the failure to make a monetary payment when due), the other Party may terminate this Agreement by providing written notice to the defaulting party. The notice shall describe with sufficient detail the nature of the default. The Party in default shall have ten (10) business days from the effective date of such notice to cure the default(s). Unless waived by the Party providing the notice, the failure to cure the default(s) within such time period shall result in the automatic termination of this Agreement.

  13. If any provision of this Agreement is held to be invalid, illegal or unenforceable, the remaining portions of this Agreement shall remain in full force and effect and construed so as to best effectuate the original intent and purpose of this Agreement.

  14. This Agreement shall be construed in accordance with the laws of the United States of America, without regard to conflict of laws rules. Venue shall be in a court of competent jurisdiction in the United States of America, and both Parties expressly consent to jurisdiction in such courts.

  15. This Agreement supersedes all prior agreements and understandings between the Parties for performance of the Services and constitutes the complete agreement and understanding between the Parties. The Parties may only amend this Agreement in a written document signed by both Parties.

  16. The Client acknowledges that success in any engagement between Client and Company is predicated on the participation and availability of the Client. Client is solely responsible for creating and implementing its own decisions, choices, actions and results arising out of or resulting from the consulting relationship contemplated herein. As such, Client agrees that Company is not and will not be liable or responsible for any actions or inaction, or for any direct or indirect result of any services provided by Company.

IN WITNESS WHEREOF, the Parties have executed this Accounting Services Letter as of the date first written above.

First Name
Last Name
Acme LLC.
First Name
Last Name
Corporation Corp.