Why it is advisable to provide engagement letters when performing bookkeeping services?

(1) It’s a way to add value to the engagement, and

(2) it’s a way to protect yourself from potential litigation.

In all engagements, we want to state exactly what we are doing. Because the client hired us to do and what they have not to do. You need an engagement letter that specifies monthly bookkeeping and nothing else.  We should obtain a signed engagement letter for bookkeeping services, even though not required by standards that include a statement that the bookkeeping service is not designed to detect or prevent fraud.

To start with, the following information below are shown on the engagement letter for Bookkeeping Services:

The proper engagement letter sets forth the objectives and terms of the proposed engagement and the nature of the services of the Bookkeeping firm that will provide to the company (the “Client”).


A. Scope/Limitations.

     Enumerate the limited services such as the firm will make no attempt to adjust the records to reflect and make no audit or other verification of the data you submit. Will not provide any financial statements and will not perform any compilation, review or audit of any of the financial information. The firm do not at any time provide legal services of any type and have not been requested to discover errors, misrepresentations, fraud, illegal acts, or theft, and therefore, have not included any procedures designed or intended to discover such acts, and agree that the firm have no responsibility to do so.

B. Agreed Upon Services.

     Enumerate the general or specific bookkeeping and taxation services you will  provide.  Bookkeeping  to include: Accounts Receivable, Bank Reconciliation, Account Maintenance and preparation for CPA, etc.  Or client may select all required services from the attached Bookkeeping Services List.



     In order to complete the service, the bookkeeping firm need to obtain information on a timely and periodic basis from client organization. These items include the data file, supporting documents, answers to any question might have, and any other information that may require to complete the work of this engagement. These items and any other items that obtain from will be based on information provided and will be used without any further verification or investigation on our part.


The engagement will begin on or about [Date].  The engagement is made on a time-and-materials, best-efforts basis.


     Client may request that we perform additional services at a future date not contemplated by this engagement letter. If this occurs, we will communicate with them regarding the scope and estimated cost of these additional services. Engagements for additional services will necessitate that we issue a separate engagement letter to reflect the obligations of both parties.



The following is our fee schedule:

A. Professional Fees.

Fees for professional services will be based on the time expended at current hourly rates, unless otherwise mutually discussed and agreed to in writing.

B. Direct Expenses.

Additional charges for computer services, fax transmissions, report production and other out of pocket disbursements, including travel costs, may be added to professional fees.

     At the end, we strongly suggest to consult your lawyer. They may have important information that will affect how you use these letters and what your letters must contain to comply with rules in your state.



stanley ng

Stanley Ng a writer of, from lifestyle entrepreneur, small business, cloud technology, and everything in between. Stanley loves to travel both for work and leisure, an eye opener for him to feel and meet each of his associates on how they work and live.

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