When a client requires accounting or bookkeeping as it is more colloquially known, they typically enlist a licensed accounting professional to do so. In such situations, there are a number of intricacies, as well as a lot of information that needs to be dealt with and kept confidential. A bookkeeping agreement is a legal agreement between a client and an accountant that allows for such arrangements, while some degree of legal protection for both parties. Such agreements may also be made on a retainer basis, which requires an additional document known as – you guessed it – a retainer. For the purposes of this guide, however, we’ll be focusing on a regular bookkeeping agreement.
What Does a Bookkeeper do?
The term ‘bookkeeper’ is simply a relaxed way of saying, accountant. An accountant’s primary responsibility is to oversee accounts and maintain records of their client’s financials. An accountant may be licensed or unlicensed, but typically, large corporations who hire accountants do so on an employee basis. For clients who wish to enlist additional expertise from an unlicensed account on a one-time basis, a bookkeeping agreement is a legal mechanism by which they can do so. Their tasks vary widely, with each client requiring a number of different things. That being said, their general responsibilities can be listed as follows;
- Inflow/Outflow of accounts: Simply oversee transactions coming in and going while maintaining records of the same.
- Bank-related matters: Maintain detailed records of any and all involvements, transactions, dealings, and requests, if applicable, from any bank(s) that the client may have to deal with.
- Payment of bills: The accountant will typically be responsible for the payment of bills for things like financial obligations such as loans, as well as operational costs, if applicable, such as utilities, etc.
- Budgets: Many clients who run businesses typically need a budget to plan their financials for each fiscal year. In most cases, this is delegated to an accountant.
- General Ledgers: The accountant typically maintains a general ledger, which is a comprehensive summary of the client’s financials.
- Tax-related dealings: The account is also typically entrusted with all tax-related pursuits. This includes, but is not limited to, the payment of taxes, filing of taxes, and serving as a representative of the client to the IRS.
- Payroll: The accountant is typically put in charge of administering the payroll, if applicable. This means that he/she is in charge of planning and executing the payment of employees, if applicable.
How Much Will a Bookkeeper Cost?
This is something that varies and depends largely on the client, as well as the bookkeeper themselves. The factors that determine the cost of a bookkeeper, however, are often fairly simple – The client themselves, i.e., a personal bookkeeper is likely to be much cheaper than if a corporation was to hire an accountant, the account themselves, licenses they may hold, the scope of the job, the term of the contract, whether there is a retainer or not and whether the bookkeeper would be a permanent employee, or serve in the capacity of an independent contractor.
Generally, advanced bookkeepers have licensed accountants with years of experience serving corporate clients – These accountants are likely to be much more expensive but will offer their exclusivity, expertise and a great degree of experience in dealing with any potential trouble. Unlicensed, personal bookkeepers typically work as independent contractors and deal with multiple clients at once, are generally unlicensed and are likely to cede to professionals in terms of expertise and applicable knowledge. That being said, the average price of a bookkeeper comes down to $20/hr across the United States.
Bookkeeping Contract Template
(Please keep in mind that this does not include the signatory section, and only includes the body of the contract. Drafting a signatory section is very easy, and simply includes stating the names of all the parties involved, along with the date on which the contract is being signed.)
In service of the client’s needs and wishes, the accountant willfully agrees to provide the following services;
____________________________________________________________ (Here, the bookkeeper will list all of the things they plan on doing for the client. If there is a schedule that the client wants them to abide by, they may attach it here as well.)
In exchange for their services, the client agrees to pay the accountant in one of the following ways;
(a) A flat fee of $__ for the entirety of the contractual term.
(b) A fee of $__/hr for the services of the accountant, for the term of the contract.
(c) Other (Please specify.) ___________
(If applicable, also insert a payment schedule in this section, as well as manner and method of payment.)
III. TERM OF THE CONTRACT
The accountant agrees to provide their services, previously outlined in Section I, to the client from the date of __________ to the date of ___________.
IV. ADDITIONAL CLAUSES
In this section, either party may insert additional clauses that may prove necessary. Typically, this includes the following;
(a) Exclusivity clause – This prevents the contractor, or in this case, the accountant, from working for other clients through the course of the contractual term. This may prove necessary if the client is a corporation or a personality that warrants complete attention from the accountant.
(b) Non-disclosure agreement – This legally prevents the accountant from disclosing any information or particulars regarding the client’s accounts to third parties. In the case of a breach, it also provides an outline of the legal ramifications that the accountant will have to face.
(c) Right-to-terminate clause – This allows the client to terminate the contract on the grounds of poor performance, as well as any additional grounds that are agreed upon.
(d) Process in case of a breach – If either party is in breach of the contract, this section typically outlines the legal action(s) that will be taken against them for breaching the said contract.
V. THE AGREEMENT IN ITS ENTIRETY
The parties hereby agree that this agreement supersedes any and all previously existing agreements between the parties, and serves to represent the entirety of the agreement between said parties.
Client Name _
Client Signature ___ Date _
Accountant Name _
Accountant Signature Date _
- MS Word
Frequently Asked Questions
Like we mentioned earlier, this depends on a number of factors that all influence the price of a bookkeeper – The client, the bookkeeper and their level of expertise, the scope of the work itself and a potential retainer are some factors that impact the cost of bookkeeping services. That being said, the average cost of a bookkeeper in the U.S is $20.
A bookkeeper’s responsibilities typically include but aren’t limited to, recording the inflow/outflow of accounts, Bank-related matters, Payment of bills, Planning budgets, maintaining the general ledgers, Tax related dealings and overseeing payroll.