What Is an Accountant Agreement?

First of all, let’s get to know what an accountant is. An accountant is known as the person who is responsible for recording different types of business transactions on behalf of an organization or company, the one who reports on the company’s financial performance to the respective management, the one who issues financial statements, and so on. Alternatively, aside from working for companies, accountants may choose to work for individuals instead, wherein their main responsibilities can involve dealing with tax returns and more. Additionally, they collaborate closely with bookkeepers to verify the accuracy of the company’s financial accounts. Overall, they play an extremely crucial role for the parties they work for, whether it is individuals or high and low-profile businesses, or multinational or small corporations.

An accountant agreement is a business document that is used by a client (be it an individual or a company) and an accountant to discuss the accounting needs of the client. This agreement is intended to establish the rights and duties of the parties participating in accounting services, as well as to identify the scope of such services and set timelines. Furthermore, this agreement aids in the establishment of a professional connection between a client and an individual accountant and is beneficial for organizations that want particular areas of their finances managed as well as people with personal accounting requirements. Aside from that, having this contract written may assist each party in setting expectations and reducing the possibility of conflicts over the term of the agreement.

What’s Inside an Accountant Agreement?

Listed below are the following details that should be added when creating an accountant agreement:

The Parties Involved. This is the first important element that should be written in the accountant agreement. In this part of the agreement, the details of the client company (the one who needs the accountant’s services) and the accountant (the service provider) is written down, comprising of their respective names, contact details such as phone number, and email, along with their city address. Additionally, succeeding this part, the effective date of when the agreement is going to start can also be provided.Engagement. This next part of the accountant agreement states that the accountant agrees to render their accounting services to the client company in accordance with the agreement. It also states that the services must be requested via written communication from the client company or their chosen representatives and that the accountant must duly provide the said services in a manner that is professional and in accordance with the client’s best interests at all times.Agreement Term. This part of the accountant agreement details the start and end date of the agreement and should state in wording that no additional accounting services may be provided after the end date unless an extension has been agreed upon and formalized by the parties involved.Payment. The next part of the accountant agreement states that the parties agree that the accountant will bill the client firm for the services rendered on a monthly basis. This section of the agreement should also say that the accountant will provide the services at a certain hourly rate and that the invoices are payable upon receipt. This clause may also state that if the invoices are not settled within a certain amount of days, the accountant may impose an extra late fee.Ownership. This section of the accountant agreement states the terms regarding product ownership throughout the agreement. As a part of the accountant agreement, the accountant will develop work items such as papers, presentations, reports, and the like, whether they are physical or electronic. This section of the agreement may also affirm that the client will own all work products. It should also be stated here that the accountant has no entitlements to this work product being created and must return any work products upon the termination of the agreement.Independent Contractor Relationship. This part of the accountant agreement determines the relationship between the client company and the accountant throughout the agreement. Inside this clause, the parties agree that the accountant performing the services under this agreement shall be considered an independent contractor rather than an employee. This agreement provision says that the agreement does not establish a collaboration, joint venture, or any other legal relationship between the client company and the accountant. Furthermore, this condition prohibits the accountant from obtaining any form of authority to engage in any agreements on behalf of the client.Confidentiality. Since it is highly likely that during the course of the agreement the parties involved will be exposed to highly sensitive information in order for some services to be completed, a confidentiality clause needs to be included. The accountant agreement’s confidentiality clause specifies that the accountant will not divulge any private information to which he or she is entrusted at any time. It also stipulates that the accountant will not utilize any of this private information for personal gain at any point. This clause continues in full force and effect even if the agreement is terminated by any party, either naturally or prematurely.Audit. The audit portion of the accountant agreement indicates that the accountant will keep comprehensive records of all business relating to the services and the agreement during the term of the agreement. It also indicates that the accountant’s records will be available for full scrutiny and audit by the customer and government authorities for the requisite amount of time.Representations and Warranties. According to the accountant agreement’s representations and warranties provision, both parties represent that they are completely authorized to participate in this agreement. This section further specifies that the accountant undertakes to deliver accounting services in compliance with the regulating body’s standards. Furthermore, this section states that all analyses, records, reports, and files would be completed in accordance with local, state, and federal legislation.Limitation of Liability. The accountant agreement’s limited liability section states that neither party shall be liable to the other or any third party for any damage arising from any part of this agreement, including, but not limited to, loss of revenue or expected profit or lost business, costs of delay or failure of delivery that are not related to or the direct result of a party’s negligence or breach.Severability. This is a clause that is present in any type of agreement. This basically states that if any provision of this agreement is declared invalid or unenforceable, in whole or in part, that provision shall be separated from the remainder of the agreement, and all other provisions shall continue in full force and effect as valid and enforceable.Workplace Safety. This part of the accountant agreement states that the provider of the accounting services should do their best to ensure the safety of the workplace that they are in at all times, and in the event of any harmful circumstance that leads to injury to the provider’s employees at the client company’s workplace, the client company is obliged to provide the necessary help to ensure the wellbeing of the affected employee/employees. This part also indemnifies the client company against any expenses or any other form of liability that may arise from accidents or medical emergencies that can be attributed to the service provider carrying out approved services in accordance with the agreement.Termination. The accountant agreement’s termination provision specifies that either party may end the agreement at any time by giving the other party written notice. Except in the case of the accountant’s breach of this agreement, if the accountant fails to remedy such breach after fair notice, the client will be liable for payment of all services done up to the date of termination. This section further specifies that, upon termination, the accountant must return to the client all client content, resources, and work output within a certain time frame.Signatures. This serves as the last important section of the accountant agreement. This section is where the client company and the accountant who will be performing the services required by the client will affix their respective names, signatures, and the date in which the signatures are affixed, pushing the agreement into full force.

How to Make an Accountant Agreement

Listed below are the steps that you need to take when you want to create an effective accountant agreement. Take note that more steps may be required depending on a number of factors such as the complexity of the services required and the parties who will be entering the said agreement.

1. Determine Who is Involved and What Services are Required

This is the first step in creating an accountant agreement. In this step, what needs to be done is to identify who is going to be involved. The parties that are usually involved are the client company that is in need of the accounting services and the accountant who will provide the said services that are needed by the company. The services needed must also be properly identified as it will dictate the type of accountant that they are going to hire. If the company needs someone who can create financial reports as well as analyze financial data, then they need a staff accountant. If the company in question, however, needs someone who knows to analyze the company’s financial standing and its potential impact on the company, then they will need to hire a management accountant.

2. Create the Main Clauses

After the parties involved in the agreement along with the respective services needed have been identified, it’s time to create the main clauses of the accountant agreement. Some of the main clauses of the agreement include the engagement, the agreement term, the payment clause, and the ownership clause. The engagement clause should state that the accountant agrees to render their accounting services to the client company in accordance with the agreement. The agreement term should clearly state the effective start and end date of the agreement and may also state that the duration of the agreement may be extended provided a formal agreement has been reached between both parties. The payment clause of the agreement how the client will pay the accountant for the services they render, and the ownership clause should state the terms regarding product ownership of intellectual property throughout the agreement.

3.Follow-up With the Boilerplate Clauses

After creating the main clauses of the agreement, the boilerplate clauses will then follow. They are usually common in other types of agreement documents and usually appear at the ending part. Some of the boilerplate clauses that can be found in an accountant agreement include the confidentiality clause, the limitation of liability clause, the severability clause, and the termination clause. The confidentiality clause prevents unauthorized use of any sensitive data that may be shared throughout the agreement. The limitation of liability clause states that neither party shall be liable to the other or any third party for any damage arising from any part of this agreement, the severability clause states that any invalid provisions shall be separated from the remainder of the agreement, and all other provisions shall continue in full force and effect as valid and enforceable, and lastly, the termination clause specifies that either party may end the agreement at any time by giving the other party written notice.

4. Get it Checked and Finalized

After completing the main and boilerplate clauses of the agreement, the next thing to do is to get the document verified for any errors and inconsistencies with the clauses that are present. Someone well versed with contracts and agreements such as a lawyer is best suited to do this task. When it has been verified that the document is clear of errors, the agreement can then be finalized and put into force by the parties involved.


What is the role of a project accountant?

Project accountants are recruited to work on a particular project. They may be a long-term employee or a contractor called in particular to handle one specific purpose, depending on the company for which they are employed. A project accountant’s responsibilities may include, but are not limited to, producing invoices, collecting bills, authorizing costs, authorizing billable hours given by others, and so on.

What is the difference between an accountant and an auditor?

The main difference between an accountant and an auditor lies in their responsibilities. The accountant’s main role is to review the company’s finances on a daily basis and to generate a financial report by the end of the year in order to report to management the company’s actual financial status and assess its strong and weak aspects. The auditor, on the other hand, is responsible for ensuring that these data are as precise as possible.

Why is an accountant agreement important?

An accountant agreement is necessary because, as trusted advisers with access to critical financial information, accountants may violate business behavior and privacy, which might have a severe impact on all parties. When it comes to financial conformity and advice, establishing an accounting agreement in place protects both clients and accountants. Furthermore, the purpose of this type of agreement is to hold all parties accountable for keeping correct and up-to-date financial records.

As said earlier, businesses who are going to employ the services of an accountant should have this document in place since it protects both their interests should anything untoward happen. Additionally, this document also holds both parties accountable for keeping everything accurate. Should you find the task of creating this document intimidating, there are plenty of sample templates in this article that you can acquire so that you have something of a reference whenever you make one.