Key Takeaways:
- A bookkeeping contract is written and sent by a bookkeeper to their clients, mentioning the details of the project.
- Creating a contract from the start can be time consuming. That is when using a free bookkeeping service agreement or contract template becomes immensely helpful.
- This article emphasizes why a bookkeeping contract is important and also provides a free template for you.
Free Bookkeeping Service Agreement Template
To make your life easier, we have developed a free bookkeeping service agreement template.
Imagine not having to draft contracts for your bookkeeping clients all over again. We've done precisely that for you! You can use the basic contract we've created as a starting point.
It functions similarly to a pre-made outline. You can make a copy of it and alter or add items to suit your unique clientele and line of business. It helps ensure that you cover all the crucial details of a contract and saves a ton of time.
This template is available as Google Doc or PDF for you to use.
Note: Using Cone Proposal and Engagement letter, you can send professional proposals with bookkeeping agreements, receive e-signatures, payment information upfront and streamline billing and payments(Stripe, GoCardless) in a single platform at 8$ or 6.5£ per month.
Try now!
Bookkeeping Service Agreement Template
This Bookkeeping Service Agreement ("Agreement") is entered into on [Date] ("Effective Date") by and between:
1. [Bookkeeping Service Provider Name], located at [Address], ("Service Provider"), and
2. [Client Name], located at [Address], ("Client").
1. Scope of Services
Services Provided:
- Expense Tracking
- Entering All Accounting Records
- Bank, Credit Card, and PayPal Reconciliation
- Cash Flow Management
- Financial Statement Preparation
Frequency of Services:
- Weekly expense tracking
- Monthly account reconciliation by the tenth of the month
- Monthly financial reporting, due by the fifteenth of every month
2. Pricing
Hourly Rate: $75 per hour.
Retainer fee:$300 retainer fee each month in exchange for up to four hours of service per month.
Time of Payment:
Refunds each month: The $300 retainer charge is due on the first of every month.
Extra Hours: Any time beyond the 4 hours that are covered by the retainer will be invoiced at the end of each month and paid within 15 days of the invoice being received.
3. Duration of Agreement
This contract will begin on August 1, 2024, and could be for 365 days, ending on July 31, 2025.
Renewal and Termination:
- Renewal: The contract can be prolonged If both parties agree for an additional 12 months.
- Termination: This agreement can be terminated by either party with 30 days' written notice.
4. Confidentiality
Confidential Information:
For the purposes of this settlement, “Confidential Information” refers to all monetary files, company documents, private facts, and a few other data supplied through the Client to the Bookkeeper that isn't publicly available. This includes but isn't confined to bank statements, tax returns, and financial analysis.
Non-Disclosure:
Without the client’s written authorization, the bookkeeper undertakes now not to show any confidential data to any 3rd parties. This consists of disclosing information to 3rd parties—like contractors or business companions—until the client has given specific permission to achieve this.
5. Client Responsibilities
Provision of Information:
The Client concurs to offer the bookkeeper access to all required financial data, which includes bank statements, receipts, invoices, and expense reports. To ensure quick flow, all files must be submitted within 5 business days of the client receiving them.
Access to Systems:
If applicable, the Client shall provide the Bookkeeper access to bank accounts, accounting software (like QuickBooks or Xero), and any other financial systems as required to complete the bookkeeping offerings. The client will offer login info and make sure that the bookkeeper is authorized to carry out their responsibilities.
Timeliness and Accuracy:
The Client consents to make sure that every supplied data is correct and appropriate. Any mistakes or omissions within the provided files that result in additional duty or corrections may additionally incur charges.
6. Termination
Either party may terminate this Agreement at any time by providing [Number of days] days' written notice to the other party. Upon termination, the Service Provider shall deliver to the Client all work products and other materials created in connection with the services provided under this Agreement.
7. Indemnification
The Client agrees to indemnify, defend, and hold harmless the Service Provider from and against any and all claims, liabilities, damages, losses, or expenses arising out of or in connection with the services provided under this Agreement.
8. Governing Law and Jurisdiction
Mediation/Arbitration:
In the occasion of any dispute or declaration arising out of or regarding this settlement, the Parties comply with first try to remedy the problem via mediation. Mediation can be achieved by means of manner of an unbiased 3rd party mediator, selected via mutual settlement of the Parties, and will take place within 30 days of the attention of dispute.
If mediation is unsuccessful, the dispute will be resolved thru binding arbitration. The arbitration could be conducted according to the policies of the American Arbitration Association (AAA) and could take place in Anytown, USA. The decision of the arbitrator will be very last and binding on each party.
Governing Law:
This agreement shall be governed through and construed according with the laws of the State of [State], without regard to its conflict of regulation principles.
Jurisdiction for Legal Actions:
If either Party seeks to pursue legal action after mediation and arbitration have failed, such action shall be brought in the courts located in [County], [State]. Both Parties consent to the jurisdiction of these courts for resolving any legal disputes
9. Amendments
This Agreement may be amended or modified only by a written agreement signed by both parties.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the Effective Date.
[Service Provider Name]
By: _______________________________
Name: [Name of Signatory]
Title: [Title of Signatory]
Date: _____________________________
[Client Name]
By: _______________________________
Name: [Name of Signatory]
Title: [Title of Signatory]
Date: _____________________________
Pro Tip: Are you in the initial stage of building your bookkeeping business? Close deals faster with this free bookkeeping proposal template!
Also, learn about accounting firm workflow process.
What is a Bookkeeping Service Agreement?
A bookkeeping service agreement is a legal deal that is made at the beginning of a commitment between a bookkeeper and his client. Generally, a bookkeeping service agreement includes the following details:
- What the bookkeeper will do
- How much it will cost
- How long does the agreement last
- What happens if things go south ways
Let's take the scenario where you run a small bookkeeping company. And to handle your finances, you employ a bookkeeper. The bookkeeper will create a contract detailing all of their duties, such as keeping track of sales, paying bills, and filing taxes, before they begin work. The contract will also contain the fees and other terms of payment.
When there is a contract in place, everyone is assured to know their obligations.
Key elements of a Bookkeeping Service Agreement or Contract
A bookkeeping contract contains several key components. Every contract should include the following sections to be effective.
Cover Letter
The cover letter provides a personalized introduction to your bookkeeping contract. It determines the tone for your professional relationship and gives a summary of the services you will perform. The cover letter should be respectful and professional, infusing client trust in your abilities and approach.
Content Tips:
- Identify the parties: Give the names and addresses of both the bookkeeper and the client.
- Provide Contact Information: Give the phone numbers and email for both parties.
- State the effective date: Mention the date when the contract will commence.
Example:
Dear [Client Name],
I am excited to help you with your financial requirements through the provision of bookkeeping services. We are devoted to delivering personalized accounting solutions that improve precision and efficiency , and we have [No. of Years] years of experience.
Our range of offerings includes consulting and bookkeeping. We are captivated with assisting you in achieving your financial desires.
Thank you for selecting [Your Business Name].
Sincerely,
[Your Name]
[Your Business Name]
[Contact Information]
Scope of Services
A scope of services section summarizes the responsibilities and duties that the bookkeeper will carry out. This section makes sure that everyone is aware of the services that are covered and how often they will be performed.
Content Tips:
- Services: Provide a detailed description of the services the accountant provides, including budget reconciliation, expense tracking, and financial reporting.
- Service frequency: Set whether each service is delivered daily, weekly, or monthly.
- Additional information: Provide any other relevant information you feel is necessary.
Example:
Services Provided:
- Expense Tracking
- Entering All Accounting Records
- Bank, Credit Card, and PayPal Reconciliation
- Cash Flow Management
- Financial Statement Preparation
Frequency of Services:
- Weekly expense tracking
- Monthly account reconciliation by the tenth of the month
- Monthly financial reporting, due by the fifteenth of every month
Pricing
The pricing part of your bookkeeping contract tells the client how much they will pay the bookkeeper. Mention clearly how much you charge per hour, or for a whole month.
Content Tips:
- Fee Arrangement: State how fees will be charged. You can select from hourly, flat, and retainer rates according to your ease of use.
- Payment Schedule: Indicate when payments are delayed as well as the frequency and form of payment (e.g., monthly, upon completion). Include any due dates or terms of payment to make sure on-time payments are done.
Example:
Pricing:
Hourly Rate: $75 per hour.
Retainer fee:$300 retainer fee each month in exchange for up to four hours of service per month.
Time of Payment:
Refunds each month: The $300 retainer charge is due on the first of every month.
Extra Hours: Any time beyond the 4 hours that are covered by the retainer will be invoiced at the end of each month and paid within 15 days of the invoice being received.
Also Read: Determining the right bookkeeping fee structure involves understanding various pricing strategies and client needs. Here is a complete guide on bookkeeping services fee structure pricing for your knowledge.
Duration of Contract
The length of the contract, including its start and end dates and the circumstances under which it may be extended, terminated, or renewed, are described in the section on contract duration. The duration of the services and the procedure for amending the agreement are made clear in this section.
Content Tips:
- Define the Term: Clearly indicate the beginning and ending dates of the agreement.
- Conditions for Renewal: Specify whether a mutual consent is required or if there are automatic renewal conditions in the contract.
- Termination and Extension: Indicate the situations beneath which either party may also terminate or prolong the contract.
Example:
This contract will begin on August 1, 2024, and could be for 365 days, ending on July 31, 2025.
Renewal and Termination:
- Renewal: The contract can be prolonged If both parties agree for an additional 12 months.
- Termination: This agreement can be terminated by either party with 30 days' written notice.
Client Duties
As a prerequisite for the bookkeepers to perform their duties effectively, clients must supply all relevant financial data and documentation, grant permission to access their financial software and systems, and maintain lines of communication open for any queries or further details. All these come under client obligations.
Content Tips:
- Information Provision: Indicate that the client must deliver the required financial records and data on time.
- Access to Systems: State that the client must grant access to any relevant systems, including bank accounts and accounting software, if such access is needed.
Example:
Provision of Information:
The Client concurs to offer the bookkeeper access to all required financial data, which includes bank statements, receipts, invoices, and expense reports. To ensure quick flow, all files must be submitted within 5 business days of the client receiving them.
Access to Systems:
If applicable, the Client shall provide the Bookkeeper access to bank accounts, accounting software (like QuickBooks or Xero), and any other financial systems as required to complete the bookkeeping offerings. The client will offer login info and make sure that the bookkeeper is authorized to carry out their responsibilities.
Timeliness and Accuracy:
The Client consents to make sure that every supplied data is correct and appropriate. Any mistakes or omissions within the provided files that result in additional duty or corrections may additionally incur charges.
Confidentiality
Keeping your client's secrets safe is a part of the service you rpovide. The confidentiality section of your contract clearly states that you as a bookkeeper won't share their financial information with anyone else.
Content Tips:
- Confidential Information: Clearly say what records are considered confidential. This usually carries any sensitive information that the client gives, which include business records, organization plans, personal records, and so on.
- Security Measures: List any particular tactics or security measures that the bookkeeper wishes to stick to for you to safeguard private data.
Example
Confidential Information:
For the purposes of this settlement, “Confidential Information” refers to all monetary files, company documents, private facts, and a few other data supplied through the Client to the Bookkeeper that isn't publicly available. This includes but isn't confined to bank statements, tax returns, and financial analysis.
Non-Disclosure:
Without the client’s written authorization, the bookkeeper undertakes now not to show any confidential data to any 3rd parties. This consists of disclosing information to 3rd parties—like contractors or business companions—until the client has given specific permission to achieve this.
Liability and Indemnification
A bookkeeping settlement's legal responsibility and indemnity clause covers duties and safeguards towards possible errors, omissions, and legal claims. It specifies the situations below which the client will indemnify the bookkeeper against specific claims or losses and establishes limits of the bookkeeper's legal responsibility.
Content Tips:
- Liability Limits: Clearly define the bounds of the bookkeeper’s legal responsibility for any errors or omissions of their duty. This helps manage expectations and protects the bookkeeper from excessive claims.
- Indemnification: Specify that the client consents to indemnify the bookkeeper against specific varieties of claims or losses, like the ones arising from the client’s very own movements or omissions. This provides financial protection for the bookkeeper.
- Exclusions and Exceptions: Include any exceptions to the liability limits or indemnification terms, consisting of instances of gross negligence or intentional misconduct.
Example:
Liability Limits:
The Bookkeeper’s liability for any errors or omissions in the overall performance in their services beneath this agreement shall be constrained to the total quantity of fees paid by the Client for the unique carrier at some stage in the month in which the error or omission passed off. The Bookkeeper shall now not be liable for any consequential, incidental, or punitive damages coming up out of such errors or omissions.
Indemnification:
The Client has the same opinion to indemnify and hold harmless the Bookkeeper from any claims, damages, or losses bobbing up out of the Client’s personal actions or omissions. This consists of, but still is not limited to, claims associated with wrong or incomplete information furnished with the aid of the Client, or any legal moves due to the Client’s financial activities.
Dispute Resolution
The dispute resolution section of a bookkeeping contract specifies how any disagreements among the bookkeeper and the client might be resolved. This phase outlines the strategies for resolving disputes and identifies the governing regulation so one can practice to the contract.
Content Tips:
- Mediation/Arbitration: Clearly specify the methods for resolving disputes, consisting of mediation or arbitration. Indicate the procedure for starting up those strategies, which includes any required steps or corporations in an effort to facilitate the decision.
- Governing Law: Identify the jurisdiction whose laws will govern the settlement. This ensures readability on which legal standards and policies will practice inside the event of a dispute.
- Jurisdiction for Legal Actions: Include a provision on where legal moves can be added if mediation or arbitration does no longer solve the dispute.
Example:
Mediation/Arbitration:
In the occasion of any dispute or declaration arising out of or regarding this settlement, the Parties comply with first try to remedy the problem via mediation. Mediation can be achieved by means of manner of an unbiased 3rd party mediator, selected via mutual settlement of the Parties, and will take place within 30 days of the attention of dispute.
If mediation is unsuccessful, the dispute will be resolved thru binding arbitration. The arbitration could be conducted according to the policies of the American Arbitration Association (AAA) and could take place in Anytown, USA. The decision of the arbitrator will be very last and binding on each party.
Governing Law:
This agreement shall be governed through and construed according with the laws of the State of [State], without regard to its conflict of regulation principles.
Jurisdiction for Legal Actions:
If either Party seeks to pursue legal action after mediation and arbitration have failed, such action shall be brought in the courts located in [County], [State]. Both Parties consent to the jurisdiction of these courts for resolving any legal disputes
Miscellaneous Provisions
These clauses cover the procedures for modifying the contract, the completeness of the agreement, the handling of invalid provisions, and the process for formal communications. Here’s how each section can be articulated:
Content Tips:
- Amendments: Specify the process for making changes to the contract. This makes sure that any changes are approved by both sides and appropriately recorded.
- Severability: Include a clause concerning severability, which states that the agreement will stay in force in case any part is invalid or unenforceable.
- Notices: Specify the proper formats and contact information for official discussions and notices between the parties.
Example:
Amendments:
Any amendments or modifications to this contract must be made in writing and signed by both Parties. Verbal agreements or informal changes will not be considered valid. All amendments will be documented as addendums to this contract and will become effective on the date specified in the amendment.
Any formal notices or communications required under this contract shall be sent to the Parties at the addresses specified in the Introduction section. Notices may be delivered by hand, sent via registered mail, or transmitted electronically (e.g., email) with confirmation of receipt. The addresses for notices are:
For the Bookkeeper: [Bookkeeper’s Address and Email]
For the Client: [Client’s Address and Email]
Signatures
The signatures section of a bookkeeping contract is where both you and your client agree to the terms. This part has spaces for both signatures and the date, making everything official and confirming that both parties accept the contract.
Content Tips:
- Signature Lines: Include designated lines for both parties to sign, along with spaces for their printed names, and dates of signing.
- Witness or Notary (Optional): You can also include 2 or more witnesses as per the law in your state.
Sample Bookkeeping Service Agreement Templates
For bookkeeping organizations in need of precise and expert agreements, Cone has produced a free proposal which has agreement in them: Bookkeeping Contract Template.
By using this template, you can quickly alter the conditions to meet your unique requirements and provide the groundwork for a fruitful and seamless working partnership. Download it now to get started on creating contracts that keep everything on track and help you manage your engagements with confidence!
For more proposal templates, such as
Accounting Services Proposal Template - UK
Accounting & Tax Services Proposal Template
Visit the Cone website now.
How to Customize a Bookkeeping Service Agreement Template?
Step 1: Know the Fundamental Structure
A solid bookkeeping contract is like a sturdy foundation for your business relationship. It's essential to include all the key details to keep everyone happy and protected. This includes clearly outlining what you and your client will do, how you'll get paid, keeping financial secrets safe, and how to end the contract if needed.
- Research Templates: Look at various bookkeeping contract templates online to understand common structures and elements.
- Determine Important Sections: Based on the way your firm works, determine what are the sections that will be relevant to include in the contract.
- Layout Customization: Select a template such as the Cone free bookkeeping contract template that best suits your company's requirements, then do the edits.
Step 2: Personalize the Introduction
Your contract's introduction, which states the parties and the agreement's date explicitly, should establish the setting. This section specifies the parties to the contract as well as its start date.
- Include Party Information: Add the full names, addresses, and contact details of both the client and the bookkeeper.
- State the Date: Mention the date on which the contract is being entered into.
Step 3: Define the Scope of Services
In this section, tell your clients about the service that you will provide as a bookkeeper. This helps to prevent any potential disagreements about what needs to be done.
- List Services: List all the bookkeeping services you will provide.
- Specify Limitations: Clearly mention any services that are not included to avoid misunderstandings.
- Detail Deliverables: Describe the expected deliverables for each service, including timelines and formats.
Step 4: Set Payment Terms
It is important to set up payment methods in order to ensure that the service is received quickly and correctly. A payment schedule, payment method and late payment penalties should be included in this section.
- Timetable of charges: Clearly state if the costs are hourly, monthly, or project-based.
- Describe the schedule of payments: Indicate when payments are due (for example, each month, when the invoice is received).
- Repercussions for Payment Delayed: Please mention any additional fees or interest that may be charged for late payments.
Also Read: Setting accurate pricing for services is one of the most significant challenges that accountants face. This guide covers how to price bookkeeping services using a free bookkeeping pricing template.
Step 5: Add General Provisions
General provisions cover additional legal and procedural aspects of the contract. These provisions guarantee the contract's thoroughness and legality.
Step 6: Detail the Termination Clause
The terms under which any party may terminate the agreement are outlined in the termination clause. It guarantees that each party is aware of the steps involved in ending the contract and its ramifications.
- State Notice Period: Indicate how long notice must be given to terminate a contract.
- Describe the terms of termination: Describe the circumstances (such as non-payment or term violations) that allow either party to end the agreement.
- Add Penalties: Make reference to any costs or penalties related to early termination.
Step 7: Finalize and Sign
To make the agreement legally binding, both parties have to sign the contract.
Also Read: A bookkeeping engagement letter clearly establishes expectations for both you and the client from the start. Learn more using this guide to writing effective bookkeeping engagement letters.
5 Best Practices for Writing a Bookkeeping Contract
While creating a bookkeeping contract, there are several things that we need to follow. Here are the top 5 best practices.
Tailor Contract Scope to Client Lifecycle: Rather than a generic service description, align the contract scope with the client's business lifecycle stage. For startups, focus on cash flow management and financial projections. For established businesses, emphasize compliance, tax optimization, and financial analysis.
Create Clear Communication Channels: Determine communication protocols, response times, and escalation procedures. Outline each party's duties and obligations, including data provision, document keeping, and decision-making authority. This prevents misunderstandings and enhance client relationships.
Offer Flexible Contract Terms: Consider providing contract choices that respond to various client needs. Consider monthly, quarterly, or annual contracts with varied service levels. This provides flexibility and accommodates diverse business cycles.
Address Third-Party Access: If the bookkeeper will share financial data with third parties (e.g., accountants, tax preparers), explicitly state this in the contract and obtain client consent.
Incorporate Technology and Automation: Specify the use of accounting software and tools to streamline processes and improve efficiency. Outline data exchange formats (e.g., CSV, Excel) and integration capabilities. This ensures smooth operations and reduces manual errors.
Pro Tip: Bookkeepers require the best accounting softwares to manage their business.Here is the top 10 Best Accounting Practice Management Software for UK Accountants and Bookkeepers in 2024 that you can opt from.
5 Common Mistakes to Avoid While Creating a Bookkeeping Service Agreement
Vague Scope of Work: Failure to precisely identify the services offered can result in disagreements and misunderstandings. Overpromising on turnaround or accuracy can harm your reputation.
Pricing and Payment: Ambiguity in pricing terms can cause confusion and disputes. There are no mechanisms for charge adjustments owing to increased workload or scope modifications. Not specifying payment terms, late fees, or how to handle unpaid invoices.
Liability and Indemnification: Underestimating potential liabilities can cause financial problems. Unfair indemnification clauses can force the client to cover your own negligence.
Confidentiality and Data Security: Insufficient measures to protect sensitive financial information. Protect sensitive information by including a confidentiality clause. This builds trust with your clients and safeguards their data.
Lack of Termination Details: Specify how either party can end the contract and what happens afterward. This provides a clear exit strategy and avoids messy breakups..
Why Should You Use Cone Software To Create a Bookkeeping Service Agreement or Contract?
Cone Proposal Software is an all-in-one tool that makes proposals, invoicing, and payments easy for bookkeepers. It offers a free bookkeeping contract template and streamlines the entire process, saving you time and effort. Here’s why it’s the perfect tool for creating your bookkeeping contracts:
Cost-Effective Solution: Unlike competitors which range from $70-$100 per user/month, Cone offers its comprehensive services at just $10 per user/month. This pricing model makes Cone an accessible choice for small accounting firms looking to enhance their operations without breaking the bank.
Flexible Proposal Editor: Cone stands out with its flexible proposal editor, letting accountants create proposals just the way they want.
Billing and Invoicing: Cone has an integrated system that handles billing and invoicing. It supports various payment methods, allowing businesses to use their current payment processors without incurring extra fees.
Comprehensive Quote Capabilities: Cone provides superior configure, price, and quote (CPQ) capabilities, filling a gap left by other proposal software that focuses solely on the proposal creation process and lacks billing and invoicing functionalities.
Affordability: Addressing the budget constraints of small businesses, Cone offers a cost-effective solution that integrates proposal, billing, and invoicing capabilities, eliminating the need for multiple costlier software options.
User-Friendly Interface: Cone is easy to use, allowing teams to start quickly with minimal learning time.
Ready to elevate your bookkeeping practice with Cone? Sign up today and experience the ease and efficiency of this software!
Create Your Bookkeeping Service Agreement or Contract Now
When beginning a new bookkeeping service, it is important to establish formal contracts to ensure a profitable and professional relationship. When your bookkeeping contract is clear, you and your clients know what's expected, avoid problems, and get paid right.
As a starting point, we recommend using the free bookkeeping contract template included in this article. You can tailor it to meet your individual requirements, making it easy to establish clear conditions and safeguard your organization.
If you want to simplify this procedure even further, consider utilizing software like Cone Proposal to payment. Cone's software makes it easy to write, maintain, and track contracts, allowing you to focus on offering high-quality bookkeeping services. Cone even offers a free bookkeeping contract template, along with various other proposal templates. With Cone, you can improve your contract management and keep your business running smoothly. So why wait? Sign up and experience Cone for yourself today.
Frequently Asked Questions
- How to create a bookkeeping contract?
Creating a bookkeeping contract involves several steps:
- Find a template that talks about the services, payments, confidentiality, and termination provisions.
- Personalize it with your and the client’s details.
- Clearly outline the services you’ll provide and the fee structure.
- Include any necessary legal provisions and ensure both parties sign the contract.
- What is a contract bookkeeper?
Self-employed contract bookkeepers deliver bookkeeping offerings to a few clients on a contractual structure. A contract bookkeeper is employed on an hourly or project basis, in preference to a full-time employee.
- How to write a bookkeeping proposal?
Writing a bookkeeping proposal involves:
- Introducing yourself and your services.
- Mentioning the bookkeeping services you offer.
- Mention the fee you charge for your services
- Show testimonials from previous clients.
- End the proposal with a call to action for further steps
- How do I write a bookkeeping business plan?
To write a bookkeeping business plan:
- Start with an executive summary that outlines your business idea.
- Describe your services and what the market needs.
- Include a marketing strategy to attract clients.
- Detail your pricing structure and financial projections.
- Provide information about your business structure and management team.
- How to price your bookkeeping services?
Start by, researching your competitor's rates, then consider your experience and skills. Choose an hourly, monthly, or project-based price plan. Choose a fee that reflects the effort you put into the assignment.
- What are the tools that bookkeepers use?
Bookkeepers use various tools for their work, including accounting project management tools like Cone QuickBooks or Xero.