Engagement agreement for accounting and financial services – what should be regulated?

Short answer: A service agreement for accounting and financial services should clearly describe the services the consultant will perform, what the client is responsible for, deadlines, reporting, fees, processing of personal data, and how the assignment is modified or terminated. Unclear division of responsibilities is a common source of disputes.

Why is a specific service agreement needed?

Accounting services are based on an ongoing flow of information between the client and the consultant. FAR describes the service agreement as central to ensuring that both parties have the same understanding of the assignment's scope, rights, and obligations. For FAR members, a written engagement letter is also a requirement.

What should the assignment describe?

• ongoing bookkeeping
• accounts payable and receivable
• payroll administration
• VAT and employer tax returns
• financial statements and annual reports
• income tax returns
• reporting and advisory services
• which services are explicitly excluded

The division of responsibilities must be concrete

The agreement should specify who provides documentation, when it must be available to the consultant, and who approves payments, salaries, tax returns, and financial statements. The client retains their own responsibility for the company's accounting and for ensuring that the information provided is complete and correct.

Fees and additional work

State whether the price is fixed, hourly, or volume-based, and how work outside the agreed scope is charged. Additional work caused by late or inadequate documentation should be addressed in advance.

GDPR and data processor

Accounting firms often process personal data on behalf of the client. The role needs to be assessed, and a data processing agreement may be required when the conditions in the GDPR are met. Instructions, security, and sub-processors should be documented.

Customer due diligence and anti-money laundering

Professional bookkeeping is subject to anti-money laundering regulations. The start of an assignment must therefore be coordinated with customer due diligence, risk assessment, and the firm's internal procedures.

Common mistakes

• no clear list of what is included and what is not
• lack of deadlines for client documentation
• unclear responsibility for tax returns and approvals
• missing data processing agreements or instructions
• price for additional work is not regulated

See the Template Store's service agreement for financial services.

FAQ

Does the accounting firm take over the client's responsibility for the bookkeeping?

No. The division of responsibilities should be clear, but the company management retains its statutory obligations.

Is a new agreement needed every year?

Not necessarily, but the agreement should be updated when the scope of the assignment or important circumstances change.

Can accounting assignments and advisory services be in the same agreement?

Yes, but the scope and responsibility for each service should be clearly stated.

The article provides general information and does not replace legal or professional advice.