What is an Accounting Services Agreement Review?
An accounting services agreement is a legal contract between a client and accounting company or professional. It explains the accountant’s work, how they’ll be paid, and other important aspects governing their working relationship.
If you have an accounting services agreement, you should review it for clarity and key terms to prevent disputes between parties.
Read the rest of this article to explain what key terms you should look for in an accounting services agreement, how to review it, and why you should consult with a lawyer for help with the review process.
What are Key Terms in an Accounting Services Agreement?
Since an accounting services agreement is legally binding, you want to ensure you review it for essential terms. These include the following:
- Work scope. The agreement must detail all the work that will be done by the accounting firm. This can include bookkeeping, tax prep, and compliance filing services.
- Payments. How payments will be made must be specified. This should include if the work is billed hourly or with some other payment structure.
- Duration. This specifies how long the accounting services agreement will last, which is especially important if it’s a short-term project.
- Fees. If there are late payments, penalties or fees the client will have to pay must be clearly outlined to prevent disputes.
- Roles. The client’s duties, such as providing accurate and updated financial records, must be clearly defined so that both parties know what’s expected of them.
- Confidentiality. Since the accountant is working with the client’s sensitive data, there must be provision for privacy measures.
- Frequency. This states how regularly the accountant will provide services.
- Termination. Should either party end the agreement, they must give notice. There might also be post-termination duties to fulfill, such as returning data.
What are Tips for Reviewing an Accounting Services Agreement?
If you want to review your accounting services agreement, there are specific details to check and revise if required.
Explain What’s Not Included
Your agreement should include information about what services aren’t included, so that you prevent issues such as scope creep. This also prevents surprise or hidden costs.
Confirm the Billing Model
The payment terms must clarify what billing model will be used, such as if the client is on a fixed monthly retainer or project-based structure. Specify the payment dates and how many days after invoicing payment should be made, so that both parties have clarity.
Check Extra Fees
You want to ensure that the agreement is transparent about additional expenses, such as software licenses and filing costs. If these aren’t included, you could put yourself at risk of sudden costs or disputes.
You should also include information about how late or missed payments are handled, such as with interest.
Mention Data Deadlines
Data deadlines are the client’s responsibility. The client must provide the accountant with all their financial records, such as bank statements and payroll information, by an agreed-on date so that the accountant can do their work on time.
Look for an Accuracy Clause
An accuracy clause states that although the accountant is preparing the client’s financials, they are not responsible for accuracy. The client is still responsible for maintaining accurate, truthful records.
Revise Vague Wording
You should review the entire agreement for clarity by flagging any vague or ambiguous wording. This should be changed so that it doesn’t result in misinterpretation that can lead to disputes.
How Can a Lawyer Help You with an Accounting Services Agreement Review?
Although you don’t always need a lawyer to review your accounting services agreement, it’s advisable if you’re concerned about its terms. This can prevent financial losses and legal disputes.
Here’s a rundown of some tasks that your lawyer will do during an accounting services agreement review.
- Clarify the services. They’ll include a detailed list of all tasks the accounting company or individual will provide to the client, to prevent misunderstandings between parties.
- Examine payment terms. This includes checking billing structures and late payment penalties. It keeps the terms fair and reasonable to avoid disputes.
- Check hidden liability risks. A lawyer will explain all provisions to minimize the accountant’s liability and fairly allocate risk between parties.
- Protect the client’s data. A lawyer ensures that the agreement contains sufficient confidentiality obligations. This includes checking for data security duties.
- Assess compliance. A lawyer will align the agreement with all relevant laws and regulations, such as regarding tax filings and audits.
- Input dispute resolution. Your agreement must have solid dispute-resolution provisions to help parties in the event of conflict. For example, it might state that parties need to go to mediation or arbitration to resolve disputes. This can reduce the risk of costly litigation.
- Negotiate with the other party. A lawyer can negotiate with the other party on your behalf for more favorable terms. This helps you to maintain a balanced and fair business relationship.
Where to Find a Lawyer to Review an Accounting Services Agreement
If you need to hire a lawyer to review your accounting services agreement, you should look for one on an online legal platform such as ContractsCounsel.
As one of the largest online legal marketplaces that gives you access to a network of vetted lawyers, ContractsCounsel makes it easy to find the right lawyer for your specific contract drafting and review requirements.
It’s easy to request that a qualified lawyer on the ContractsCounsel platform reviews your accounting services agreement. Here are four steps to follow online:
1. Go to the ContractsCounsel marketplace, where you can post your project for free. Include some information so that you’ll be directed to the most suitable lawyer.
2. Receive lawyer bids. Instead of looking for the right lawyer, you’ll receive multiple bids from lawyers directly on the platform who can assist you.
3. Review lawyer profiles. Once you receive the lawyer bids, you should review the lawyers' profiles. There’s lots of info on the platform to help you choose the best lawyer, such as their location, client ratings, years of experience, and field of expertise.
4. Connect with a lawyer you think is best suited to your requirements and hire them to review your accounting services agreement.
