An engagement letter is the agreement between you and a bookkeeping client. It spells out what you will do, what the client will do, what it costs and what happens when something falls outside that. In bookkeeping, scope creep is the most common problem: a monthly reconciliation client slowly turns into a payroll, invoicing and tax-question client at the same price. A good engagement letter keeps that in check.
This is a planning checklist, not legal advice. Contract law, data privacy rules and the limits on what non-credentialed bookkeepers can do vary by state. Have a local attorney review your template, and check with your insurer if you carry professional liability coverage.
The checklist
1. The parties and the business
Your business name and contact details, the client’s legal business name, the owner or authorized contact, and which entities are covered if the client owns more than one business.
2. Services included
Be specific. For example:
- Categorizing transactions for up to a set number of bank and credit card accounts
- Monthly reconciliations of those accounts
- Monthly profit and loss statement and balance sheet
- A short monthly review call, if offered
- Year-end package for the client’s tax preparer
Many bookkeepers tie packages to transaction volume or number of accounts, so note the limits. Our guide on how much to charge for bookkeeping covers building packages this way.
3. Services not included
List what is outside scope or available for an extra fee: payroll, sales tax filings, bill pay, invoicing, catch-up work for prior periods, and anything that requires a credential you do not hold, such as tax preparation, tax advice, audits or reviews. Our guide on bookkeeper certifications covers where those lines typically sit.
4. Client responsibilities
- Providing statements, receipts and answers to questions by a set day each month
- Keeping bank feeds connected and notifying you of new accounts
- Responsibility for the accuracy and completeness of the information they give you
- Responsibility for business decisions, tax filings and compliance
5. Timeline and deadlines
When you deliver monthly reports, for example a set number of business days after you receive everything you need. Say clearly that late documents mean late reports.
6. System access
Which accounting software is used, who owns the subscription, and what access level you get. Many bookkeepers use read-only bank access and their own user login in the accounting software, rather than the client’s credentials. Note that the client owns their data and how it will be handed over if the engagement ends.
7. Fees and payment
- Monthly fee, and what it covers
- Separate fee for any cleanup or catch-up work
- Hourly or project rate for out-of-scope requests
- Whether you bill in advance, which many bookkeepers prefer, and how (often by automatic payment)
- What happens if payment is late, such as pausing work
8. Scope changes and price reviews
How you will handle growth in transactions or new requests, and that you will review the fee periodically, for example once a year or when volume moves outside the package limits, with notice before changes take effect.
9. Confidentiality and data security
How you keep client information confidential, how documents are shared (a secure upload portal rather than email attachments), and how you store and eventually delete records. Some states have specific data protection rules for businesses that handle financial information, and federal rules may also apply to some financial service providers, so check what applies to you.
10. Limits of the engagement
A plain statement that bookkeeping is not an audit, that you rely on the information provided, and that you are not responsible for detecting fraud. How you limit liability, and whether that is enforceable, depends on your state, so get professional advice on this section.
11. Term and termination
Start date, whether the engagement continues month to month, how much notice either side must give to end it, final billing, and how you will hand over files and remove your access.
12. Signatures
Signed by you and the client, or accepted electronically, with the date. Keep a copy and update it when the scope changes.
Make it a normal part of onboarding
Send the engagement letter with your proposal, walk through the key points on a short call, and make signing the first step of onboarding before anyone shares bank access. A clear letter makes you look established, and it gives you something calm and neutral to point to when a request goes beyond what was agreed.
Get an engagement letter template with the kit
Our bookkeeping starter kit includes monthly package pricing, a client intake form, secure document upload, an engagement letter template and a monthly close checklist. We build it once 25 people vote for it, and voters get 20% off at launch. Vote for the bookkeeping kit.
This is general information, not legal or tax advice. Contract, privacy and professional licensing rules vary by state. Have your engagement letter reviewed by a local attorney.
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