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Bookkeeping Agreements/Contracts

Many of us professional bookkeepers enter into a contractual agreement with our clients to do their bookkeeping.  We have found that this type of agreement, rather than a handshake or verbal agreement spells out how the work from our side will be accomplished and what our expectation is from the client side of the equation.  In other words what are we delivering to the client as long as they deliver the information required for us to complete the job.

We have over 30+ clients that are happy with our agreement as it pertains to them.  In most cases, it is a template that have the names and dates changed, for each client, as the work is pretty standard in our industry.  We do have the odd new client that has special requirements and those requirements are stipulated usually by appending the original agreement.

We recently had a possible new client that wanted a quote for the work we might be performing on their behalf.  The quote was specific and outlined that one month of bookkeeping would be X and would include… The quote also talked about “back work”.  In our business, “back work” is bookkeeping that has not been done from the previous year, regardless if it is calendar or fiscal.    This type of work is usually outside the agreement and is charged by the hour.    Current year work is not considered, by us, to be “back work”, just to clarify.  This means that if you are behind a couple of months prior to the contract being signed, we have to “catch” you up to ensure all the banking information on your balance sheet is correct and your income statement reflects the correct amounts.

The possible new client liked the quote and decided to utilize our services to complete the second quarter of the company bookkeeping.  We printed up the agreement and everyone signed and was happy.  Unfortunately for us, the client interpreted our agreement as the actual bookkeeping would start from June forward because that is the date the contract was signed.  In their industry this is correct as the work does not go backward for them.  We did explain verbally to this client that April and May had to be completed along with June and since it is in current year, it is not back work.   Somewhere all this got lost in the translation and now this became an issue for our client as they indicated that we essentially were not forthcoming in our agreement.

Oh Dear…what now.  We made every attempt to explain again, the quote and the agreement and how this works in our industry.  We were unsuccessful.  The best solution was agreed to by all parties and that was to finish where we are at and return all hard copies to the client and when the final cheque was in our hands and cashed…the electronic portion that we created, would be sent to them.  We wished them much success in their future endeavors.

No professional bookkeeper wants this type of misunderstanding to occur.  It is unfortunate when it does, however, if both parties can walk away learning from the experience then it is not so bad.

We are going to have a good look at our agreement to see if we can define “monthly bookkeeping” better.

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