Bookkeeping engagement letter template for BC bookkeepers

A free bookkeeping engagement letter template for BC bookkeepers: one clause per topic, from scope and close date to fees, privacy and handover.

Here is a full engagement letter for a bookkeeper in British Columbia and a new client. Fill in every field in [BRACKETS], delete the options that don't apply, and both sign. Each clause covers one topic, so when a client disputes what you agreed to do, you can point to the clause. How to fill in each one is below the letter.

The letter

Bookkeeping engagement letter

Date: [DATE]

1. Parties. This letter is an agreement between [CLIENT LEGAL NAME] ("the Client"), of [CLIENT ADDRESS], and [BOOKKEEPER NAME OR BUSINESS NAME] ("the Bookkeeper"), of [BOOKKEEPER ADDRESS].

2. Start date. The Bookkeeper's services start with the books for [FIRST MONTH AND YEAR] and continue month to month until either party ends this agreement under clause 12.

3. Services in scope. Each month, the Bookkeeper will:

1. Record the Client's transactions in the Client's [QuickBooks Online / Xero] file.
2. Reconcile every bank account and credit card to its statement.
3. Keep accounts receivable and accounts payable up to date.
4. [If chosen:] Record payroll from the Client's payroll reports. Payroll deductions are remitted to the CRA by [the Client / the Client's payroll provider / the Bookkeeper].
5. [If chosen:] Prepare the [monthly / quarterly / annual] GST/HST return from the books, for the Client to review and file.
6. [If chosen:] Prepare the [monthly / quarterly / semi-annual / annual] BC PST return from the books, for the Client to review and file.
7. Close the month and send the Client a profit and loss statement and a balance sheet, prepared from the Client's records for management use.

4. Services not in scope. The Bookkeeper will not:

1. Perform an audit, a review or a compilation engagement, or issue any opinion or report on the Client's financial statements. In BC, only CPAs can provide audit, review and compilation engagements [1].
2. [If the Bookkeeper is not a CPA:] Call themselves a professional accountant. Only CPAs can use that title [1].
3. Give tax advice or tax planning, or prepare or file income tax returns, unless the parties add that service in writing.
4. Give legal advice.
5. File any return or make any payment for the Client, unless clause 3 or a later written change says so.

5. What the Client supplies. By the [NUMBER] business day of each month, the Client will supply, for the month before:

1. Statements for every bank account, credit card and loan, or read-only bank feeds that cover them.
2. Receipts and invoices for purchases and sales.
3. Payroll reports, if clause 3 includes payroll.
4. Answers to the Bookkeeper's questions within [NUMBER] business days of being asked.

6. Monthly close date. If everything in clause 5 arrives on time, the Bookkeeper will close the month and send the reports in clause 3 by the [NUMBER] business day of the following month. If anything arrives late, the close date moves back by the same number of business days.

7. Fees and billing.

1. [Choose one:] A fixed fee of $[AMOUNT] a month, which covers up to [NUMBER] transactions a month. [Or:] $[AMOUNT] per transaction recorded.
2. Months over the transaction limit are billed at $[AMOUNT] per extra transaction.
3. Work outside clause 3 is billed at $[AMOUNT] an hour, only after the Client agrees to it in writing.
4. The Bookkeeper invoices on the [DAY] of each month, and payment is due within [NUMBER] days. The Bookkeeper [charges / does not charge] GST on these fees, and the amounts above are [before / including] GST.

8. Catch-up work. [Delete this clause if the books are current.] The books are behind from [FIRST MONTH BEHIND] to [THE MONTH BEFORE THE START DATE]. Bringing them up to date is not part of the monthly fee, and [includes / does not include] preparing overdue GST/HST and PST returns for those months. The Bookkeeper will quote catch-up work in writing before starting it, at $[AMOUNT] per month of books or $[AMOUNT] an hour.

9. Access and the Client's own file. The books stay in the Client's own [QuickBooks Online / Xero] subscription, and the Client owns them. The Bookkeeper works through a user login the Client grants. [If clause 3 includes GST/HST or payroll:] The Client authorizes the Bookkeeper on its CRA accounts by [adding the Bookkeeper as a representative in My Business Account / approving the Bookkeeper's request made through Represent a Client], at access level [1 / 2] [3]. [If clause 3 includes PST:] The Client gives the Bookkeeper eTaxBC access by [creating a logon for the Bookkeeper in its own eTaxBC account / approving the Bookkeeper's third-party access request] [4]. The Client can remove any of this access at any time.

10. Confidentiality and privacy. The Bookkeeper will keep the Client's information confidential. Personal information in the Client's records, such as customers' and employees' details, stays under the Client's control. The Bookkeeper will protect it with reasonable physical, administrative and technical safeguards against unauthorized access, use, disclosure, copying, change or disposal [5]. The Bookkeeper will use it only to provide these services, and will disclose it only as the Client directs or the law requires. If the Bookkeeper learns that the Client's information has been accessed without authorization, the Bookkeeper will tell the Client within [NUMBER] days.

11. Errors. The Client will tell the Bookkeeper about any error in the books or reports within [NUMBER] days of receiving them. The Bookkeeper will correct its own errors at no charge. Corrections caused by missing or wrong information from the Client are billed under clause 7.3. [Optional liability limit: delete this sentence if you don't use one. A lawyer can write one for you.]

12. Ending the engagement. Either party can end this agreement with [NUMBER] days' written notice. When it ends:

1. The Bookkeeper finishes and bills the work for the months already closed, or for the month in progress if both parties agree.
2. The Bookkeeper sends the Client a list of open items and any working papers for months it has billed.
3. The Bookkeeper removes its own access to the Client's file and accounts by [NUMBER] days after the end date, and tells the Client when that's done.
4. The Client pays all invoices for work done up to the end date.

13. Changes. Any change to this agreement must be in writing and signed or confirmed by email by both parties.

14. Signatures.

Client: [NAME, TITLE] Signature: ________________ Date: ________

Bookkeeper: [NAME] Signature: ________________ Date: ________

How to fill it in

1. Parties: use the client's legal name, as it appears on their GST/HST registration or incorporation.
2. Start date: use the first month you'll close, not the date you sign.
3. Services in scope: delete every [If chosen] line the client didn't buy. Pick the return frequencies from the client's CRA and eTaxBC accounts, and name who remits payroll. Keep "for the Client to review and file" unless you'll file returns, and if you will, change clause 4.5 to match.
4. Not in scope: keep items 1, 3, 4 and 5 as they are. Delete item 2 if you're a CPA.
5. What the client supplies: pick a day that leaves you time to meet clause 6.
6. Close date: pick a business day you can keep every month. It's the number your client will hold you to.
7. Fees: choose fixed or per transaction, and delete the other. Say whether you charge GST on your fees. Count the client's transactions over the last three months before you set the limit.
8. Catch-up: if the books are behind, fill in the months and the price. If they're current, delete the clause.
9. Access: name the software. If the client doesn't have a subscription yet, they buy it in their own name before you start. For the CRA, the client adds you as a representative in My Business Account, or you send a request through Represent a Client and the client confirms it [2]. Level 1 gives access to information only. Level 2 also lets you make certain account changes [3]. For eTaxBC, the client either creates a logon for you in their own account, or approves the request you send from a third-party eTaxBC account [4]. Choose with the client. There's no default.
10. Privacy: fill in how many days you'll take to report unauthorized access.
11. Errors: fill in the reporting window. Delete the liability sentence unless a lawyer has written one for you.
12. Ending: fill in the notice period and how many days you'll take to remove your access.
13. Changes: no fields.
14. Signatures: both sign, and each keeps a copy.

This template is a starting point, not legal advice. Have a lawyer review it for your own practice before you use it with clients.

What comes next

Filling this in for every new client takes time, and the letter is only part of onboarding. You still have to gather the intake answers and set up access to the client's software and accounts. That's the next problem.

We're building an onboarding kit: the letter, the intake questionnaire and the access checklist as one tool your agent fills in from your first call with a client. It isn't built yet, so there's no price or date. Join the list.