Email template
Engagement letter for bookkeeping services
Most bookkeeping disputes trace back to three things the letter left vague: what is included, when the client's records are due, and what happens when they are late. This letter states each in terms you can enforce. It does not replace advice from your own attorney about liability and state requirements.
When to use it
Send this after the client has agreed to the price and before you touch their books or request a bank login. Do not start work until the signed copy is back.
Engagement letter: bookkeeping services for [client_name]
Hi [client_name],
Thank you for choosing [firm_name]. This letter sets out what we will do, what we need from you and what it costs. Please sign it by [signature_deadline]. We start work on [start_date] once the signed copy and the first set of records are in.
Scope. We will provide [bookkeeping_scope, for example: monthly categorization of bank and credit card transactions, bank and credit card reconciliation, and a monthly profit and loss statement and balance sheet] for [entity_name] on a [accrual or cash] basis, using [accounting_software]. We will deliver the monthly reports within [number] business days after we receive complete records for the month.
Payroll and 1099 work. [Included or Excluded]: processing payroll and preparing Form 941, Form 940 and Form W-2. If included, Form 941 is due April 30, July 31, October 31 and January 31 for the quarters ending March, June, September and December (a deadline that falls on a weekend or holiday moves to the next business day)., and Form 940 and Form W-2 are due January 31. [Included or Excluded]: Form 1099-NEC. For payments made in 2026 the reporting threshold is $2,000, and the form is due to the contractor and the IRS on January 31, 2027. We need a signed Form W-9 from every contractor before the first payment, or we cannot report them.
Your responsibilities. You will send, by the [day_number] day of each month: statements for every bank, credit card and loan account for the prior month, receipts or a description for any charge over [receipt_threshold], and a list of invoices sent and bills unpaid. You will tell us within [number] days about new accounts, loans, assets bought, or owners joining or leaving. You are responsible for the accuracy and completeness of what you give us. We do not audit your records, and we rely on them as given.
Late or missing records. If records arrive after the [day_number] day, we will deliver that month in the next cycle, not on the usual schedule. If an account is missing, we will post the transactions we can see to Uncategorized, mark the month as incomplete and tell you in writing. If three months pile up, we will pause reports until the oldest month is caught up. A catch-up month is billed at [catchup_rate] per month.
Fees. Our fee is [monthly_fee] per month, billed on the [billing_day] of the month by [payment_method]. Fees cover the scope above. Anything outside it, including [out_of_scope_examples], is billed at [hourly_rate] per hour after we send you an estimate and you approve it in writing. Fees may change with [number] days' written notice. Invoices unpaid after [number] days pause our work until the balance is current.
Exclusions. Unless we agree otherwise in writing, this engagement does not include tax return preparation, tax advice, audit or review opinions, representation before the IRS or a state agency, sales tax filings, or forensic work. Representation would need a separate Form 2848 and a separate letter. Bookkeeping does not guarantee that your tax filings are correct.
Records, privacy and ending the engagement. Your original records stay yours, and we keep our copies for [retention_period] after the engagement ends. We use [secure_portal] for documents and ask that you not send account numbers or Social Security numbers by email. Either of us may end the engagement with [number] days' written notice. We will hand over the books in [export_format] within [number] business days after the final invoice is paid.
To accept, reply to this email with I agree or sign here: [signature_link]. Questions before you sign are welcome.
Thank you, [sender_name] [firm_name]
Replace the placeholders in braces with the client's details. Keep the client's tax ID or account number out of the email.
Notes before you send
- Choose the deadline day from your own workflow, not from the bank's. Most statements are final within five business days, so a request for the 10th gives the client a real chance to comply.
- Name the software and the basis (cash or accrual) in the scope. A client who thinks the books are accrual when you keep them on a cash basis will blame you for the reports.
- Write exclusions as specific examples, such as year-end tax return, IRS letters, sales tax returns and cleanup of prior years, so a later request is clearly billable.
- Take the signature before you ask for bank access. If the client delays signing, the delay is a preview of how they will treat your document deadlines.
- Use a separate letter for tax preparation or representation. Mixing them makes it unclear which deadlines and fees apply to which work.
- Review the letter once a year before you send the price increase. Update the fee, the catch-up rate and any threshold the tax law changed.
Questions about this template
What should a bookkeeping engagement letter include?
At minimum: the parties, the exact services and reports, the accounting basis and software, the client's monthly duties and deadlines, fees and billing terms, what is excluded, how records are kept and returned, and how either side ends the work. Add a signature line with a date.
Do I need an engagement letter for a small bookkeeping client?
Yes. There is no federal rule requiring one for bookkeeping, but without it scope and payment disputes depend on memory and email threads. A one-page letter signed before work starts is enough for a small client.
How is a bookkeeping engagement letter different from a tax preparation one?
A bookkeeping letter covers recurring monthly work and must set record deadlines and a catch-up rate. A tax letter covers one return, the client's duty to give complete information, and the filing authority. If you also represent the client, the IRS requires its own form, Form 2848.
Should the letter mention 1099 reporting?
Yes, state whether you prepare Form 1099-NEC and who collects Form W-9. Payments made in 2026 use the $2,000 threshold. Earlier years used a lower threshold, so a client who pays contractors across both years needs to know which applies to which filing.