You are looking to start your own accounting practice. From here you want to make sure you are in communication with your clients. The best way to lay out these duties, roles and responsibilities is to institute a proper engagement letter. In this discussion please draft a brief engagement letter.
Also please response each posted down below # 1to 3
This Accountant Engagement Agreement (Agreement) is made and entered into on October 22, 2020 by and between:
The business entity of Hoover Snyder Accounting LLC (Accountant) authorized by Michelle Hoover
The business entity of Client XYZ (Client) authorized by John Smith.
The Client and Accountant agree to the following terms and conditions for the Accountant’s services, as an independent contractor, in exchange for fees:
1. Services. The Accountant agrees to provide the following services accounts payable, accounts receivable, audit work, bank reconciliations, bill payment, budget preparation, customized reports, detailed general ledgers, financial statements, general bookkeeping, payroll/check register, payment of payroll and sales tax, and any other requests agreed upon by the Client and Accountant. Accountant will not prepare annual Federal Tax Returns.
The Accountant will conduct Services on a weekly basis. Business financial information received by noon Monday, will be processed by 5:00 Friday. Monthly Financial Statements will be completed by the 10th of the following month. The Accountant will comply with GAAP and all Federal and State laws, regulations, and procedures when completing Services in accordance with this Agreement.
2. Fees. The Client agrees to pay the Accountant $75 per hour for providing Services.
The Client shall pay the Accountant on a recurring monthly basis with payment due Net10. Late payment will result in delay or termination of future Services provided by Accountant.
3. Expenses. In addition to the Fees provided in Section 2, the Client agrees to reimburse the Accountant for any out-of-pocket expenses incurred that include, but are not limited to travel expenses, audit fees, tax fees, photocopying, and postage.
4. Term. This Agreement will begin November 1, 2020 and continue for an on-going basis until terminated in accordance with Section 5 of the Agreement.
5. Termination. This Agreement may be terminated by Client or Accountant by written notice of at least 30 days. Upon termination Client will pay Accountant in full for any remaining balance owed.
6. Client Obligations. The Client will be solely responsible for providing the Accountant all financial information related to business affairs necessary to perform the Services under this Agreement. The Client acknowledges and agrees that the accuracy of financial information supplied to the Accountant is the sole responsibility of the Client and the Accountant will be held harmless from any liability resulting from the accuracy of the financial information provided.
7. Confidentiality. The Accountant agrees to hold all Confidential information of the Client in strict confidence and will not disclose Confidential information to 3rd parties without express prior written permission of Client or use Confidential information for other purposes.
Additional Terms & Conditions. Financial documents will be securely shared using SmartVault.
Accountant’s Signature _________________________________________Date____________________
October 22, 2020
Ms. Janet Jackson, Tax Director
Silver Widgets, LLC
2121 Graystone Street
Dallas, TX 75020
Dear Ms. Jackson,
This letter is to confirm my understanding of the terms and objectives of my engagement and the nature and limitations of the services I will provide. I will prepare the following federal and state tax returns for Silver Widgets, LLC (the Company) for the year ended December 31, 2020:
- Form 1120, U.S. Corporation Income Tax Return
- Form 05-158, Texas Franchise Report,
- Form 05-102, Texas Public Information Report
You will provide me with the information needed to complete the Company’s tax returns. I will send you an information request on January 15, 2021 to help you gather the pertinent data. I will not audit or verify the information you provide, but may follow up with you to request additional information. You are responsible for the accuracy and completeness of information provided. To have your returns completed in time for the March 15th filing deadline, you agree to return the requested information by February 15, 2021.
I will use my professional judgment in preparing the Company’s tax returns. I will also prepare the tax returns in accordance with the Internal Revenue Code and Regulations. If the law is unclear regarding a tax position taken, I will explain the possible positions the Company may take on the return. It is your decision on which position to take on the returns, but it must be consistent with tax law.
If the Company’s return is selected for audit, it may be subject to interest and penalties. I assume no liability for the additional penalties or assessments. I will not represent the Company before the IRS unless I am engaged to do so as evidenced by a separate agreement.
I agree to keep information you provide confidential. If I am asked to disclose any confidential information, unless I am required to by law, I will not provide such disclosure until you sign an approval form allowing me to release the information. The Company agrees to pay any and all reasonable expenses that I incur, including legal fees, that are a result of attempts to protect the confidentiality of the information. I will keep the supporting tax return work papers and files related to the aforementioned returns for a period of seven years, after which the files and work papers will be destroyed according to my document retention policy.
I am only engaged to do the work outlined in this agreement. If additional tax returns or services are necessary, I can be engaged under a separate agreement. My fixed fee for the preparation of the Company’s returns shall be $2,500 and will require a 50% deposit payable upon commencement of work and 50% due at delivery of the report. Payment may be made by company credit card or company check. All invoices are due and payable upon presentation.
If any dispute arises (between/among) the parties hereto, the parties agree first to try in good faith to settle the dispute through non-binding mediation. The costs of mediation shall be shared equally by the parties. The parties agree that, if any dispute cannot be settled through mediation, the dispute may then be brought before a court of competent jurisdiction, but the matter will ultimately be decided by the court, sitting without a jury. The parties recognize they have knowingly and voluntarily agreed to waive all rights to have any such dispute determined by a jury, but otherwise retain all rights afforded under the applicable civil justice system.
This Agreement, and the rights and obligations of the Parties hereunder, shall be governed by and construed in accordance with the laws of the state of Texas (without giving effect to its provisions on conflict of laws). This Agreement is fully and voluntarily entered into by the Parties. Each Party states that he, she, or it has read this Agreement, has obtained advice of counsel if he, she, or it so desired, understands all of this Agreement, and executes this Agreement voluntarily and of his, her, or its own free will and accord with full knowledge of the legal significance and consequences of this Agreement. I
If this letter correctly expresses your understanding, please sign the enclosed copy where indicated and return it to me. I appreciate the opportunity to serve you and trust that our association will be a long and pleasant one.
Very truly yours,
Dear Elaine :
The purpose of this letter is to confirm our understanding of the terms of our engagement as your CPA.
We appreciate the opportunity of working with you and advising you regarding your income tax. To ensure a complete understanding between us, we are setting forth the pertinent information about the services that we will perform on your behalf.
We will prepare your 2020 and 2021 future federal and state(s) income tax returns from information which you will furnish to us. We will perform our tax services under the assumption that all the information you submit to us is true, complete and accurate according to documents and other information retained in your files. We reserve the right to withdraw from this engagement if requested information is not received in a reasonable period of time.
As your CPA, we collect information provided by you from your tax organizer and information that we develop as part of our service. We are required to keep all information about our engagement confidential so we will not make any disclosure about you unless we have your approval or are required/permitted by law. We are committed to safekeeping of your confidential information and we maintain physical, electronic, and procedural safeguards to protect it.
You should note that the IRS provides for interest and penalties which may be imposed on you. Most of these penalties provide for assessment in the event of some wrongdoing or negligence on the part of the taxpayer. However, penalties may be imposed even though there is no fraud, negligence or willfulness on your part. The only way to avoid certain penalties is to show that there was either “substantial authority” for the position taken or to make “adequate disclosure” on the return.
Our fees estimates are based on the time required by our team members assigned to this service. We estimate our fees for this service will be $ 1,000.
We also will bill your Company for our reasonable out-of-pocket expenses.
Our fees and out-of-pocket expenses will be billed as follow:
|Date||Amount in USD|
|November 1, 2020||500.00|
|January 1, 2021||500.00|
The invoices are due and payable upon receipt.
Your original records, which will be returned to you, comprise the backup and support for your income tax returns. Our records and files are our property and not a substitute for your own records. Our firm destroys client files after a retention period of five years, after which time these items will no longer be available. Also, catastrophic events or physical deterioration may result in our records being unavailable.
We are pleased to have the opportunity to provide services to you. If you have any questions about this letter, please discuss them with Bruno Akinaga at (786) 111-1111. If you agree with the terms in this letter, please sign one copy of this letter and return it to us.
Very truly yours: