How to Draft an Agreement with Your Certified Public Accountant (CPA)
Drafting an agreement with your Certified Public Accountant (CPA) is an important step in establishing a professional relationship and ensuring that both parties understand the terms and expectations of the engagement.
Here are some steps you can follow to draft an agreement with your CPA:
Clearly define the specific services that the CPA will be providing.
This could include preparing and filing tax returns, performing audits or reviews, providing financial planning or consulting services, or assisting with financial management tasks.
2. Establish payment terms:Determine how much the CPA will charge for their services and how payment will be made.
This could be an hourly rate, a fixed fee, or a percentage of the services provided.
Be sure to include any additional charges, such as expenses for travel or materials.
3. Discuss confidentiality:Confirm that the CPA will maintain confidentiality about your financial information and will not disclose it to any third parties without your consent.
4. Specify the duration of the engagement:Determine how long the CPA will be providing services and whether the agreement can be terminated by either party.
5. Review and sign the agreement:Review the agreement with your CPA and make any necessary revisions.
Once both parties are satisfied with the terms, have both parties sign and date the agreement.
6. Determine the level of communication:Discuss how often you would like to receive updates and progress reports from the CPA, and whether you prefer communication by phone, email, or in-person meetings.
7. Specify the level of access to financial information:Determine the level of access the CPA will have to your financial information and how it will be shared.
This could include access to bank statements, tax returns, financial records, and other relevant documents.
8. Address potential conflicts of interest:If the CPA has any potential conflicts of interest, such as working with another client in the same industry as you, it is important to disclose this and address any concerns.
9. Set expectations for deadlines:Establish deadlines for completing tasks and submitting reports, and specify any consequences for missing those deadlines.
10. Include provisions for dispute resolution:It is a good idea to include a clause in the agreement outlining the steps to be taken in the event of a dispute between the parties.
This could include mediation or arbitration.
11. Include a confidentiality provision:Confirm that the CPA will maintain the confidentiality of your financial information and will not disclose it to any third parties without your consent.
This is especially important if the CPA will be handling sensitive information, such as trade secrets or personal financial data.
12. Specify the terms of termination:Determine how the agreement can be terminated by either party and include any necessary notice periods or provisions for ongoing work.
13. Address liability:Include provisions in the agreement addressing the CPA's liability for any errors or omissions in their work.
14. Include indemnification provisions:Indemnification clauses outline the responsibilities of each party in the event of a legal claim or lawsuit.
This could include provisions requiring the CPA to indemnify you against any damages resulting from their work, or requiring you to indemnify the CPA against any damages resulting from your actions.
15. Review and update the agreement regularly:It is a good idea to review and update the agreement periodically to ensure that it accurately reflects the current status of the engagement.
This could include changes to the scope of services, payment terms, or other provisions.
By addressing these points in your agreement, you can establish clear expectations and minimize the potential for misunderstandings or conflicts in your professional relationship with your CPA.
The previous article provided a comprehensive guide to drafting an agreement with a Certified Public Accountant (CPA).
It covered the key considerations and steps involved in establishing a professional relationship with a CPA, including defining the scope of services, establishing payment terms, discussing confidentiality, specifying the duration of the engagement, and reviewing and signing the agreement.
The article also covered additional considerations such as the level of communication, access to financial information, potential conflicts of interest, expectations for deadlines, and provisions for dispute resolution, as well as provisions for confidentiality, terms of termination, liability, and indemnification.
The goal of the article was to provide a thorough overview of the process of drafting an agreement with a CPA and to ensure that both parties understand the terms and expectations of the engagement.
In conclusion, drafting an agreement with your Certified Public Accountant (CPA) is an essential step in establishing a professional relationship and ensuring that both parties understand the terms and expectations of the engagement.
By following the steps outlined in this article, including defining the scope of services, establishing payment terms, discussing confidentiality, specifying the duration of the engagement, and reviewing and signing the agreement, you can set the stage for a successful and mutually beneficial relationship with your CPA.
Additionally, by considering additional considerations such as the level of communication, access to financial information, potential conflicts of interest, expectations for deadlines, and provisions for dispute resolution, you can ensure that all necessary bases are covered and minimize the potential for misunderstandings or conflicts.
By taking the time to carefully draft an agreement with your CPA, you can protect your interests and set the stage for a successful and productive working relationship.