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What to Look for in an Accounting Services Agreement in California

Determine what to look for in an accounting services agreement in California. The Roseville tax accountants at Cook CPA Group break down the elements of an accounting services agreement in California.

Maybe you need to hire an accountant because you’re thinking of opening your own business for the very first time, and you need to know how to prepare financially. Maybe you need an accountant because you’re planning on moving to California with your family, and you have questions about your liability for different types of state and federal taxes. Maybe you’re simply the type of person who gets peace of mind from knowing that a professional CPA is taking care of your bookkeeping and financial planning. But no matter why you want to hire a CPA in California, it’s important to make sure to look for certain elements in your service agreement. In this article, Cook CPA Group explains some important points to consider when hiring an accountant or accounting firm.

Why You Need a Written Accounting or Bookkeeping Contract

When you initially begin the process of comparing different bookkeeping and accounting services in Sacramento, Roseville, or other parts of California, you are likely to find that some firms or individuals keep fewer records than others. While a verbal agreement or casual conversation might seem like an adequate starting point (and might also seem like less work on your end), you should always choose an accountant who maintains a detailed, secure, and highly organized systems of files and paperwork.

It may sound like a “no-brainer,” but it is critical to ensure that accounting service agreements – like any type of contract – are clearly set forth in writing. Having a written service agreement establishes clearer expectations by setting distinct responsibilities for all of the parties involved over a preset period of time. If you and your accountant are ever involved in a dispute in the future, your written contract will serve as a shared basis that you can always refer to.

In addition to providing clarity and creating a clear reference point in the event of future disputes, a written agreement also provides a detailed breakdown of the scope of services that are included in the deal, which is important as each individual or company has different expenses, assets, debts, investments, future plans, and long-term versus short-term needs. For example, accounting services for trucking companies will focus on very different legal and financial issues than accounting services for hospitals.

Elements of an Accounting Services Agreement

First and foremost, it’s important to emphasize that no two service agreements will be identical. Even minor variations in boilerplate language can have major implications for the scope of a service engagement, which is why it’s important to review written contracts carefully, taking the time to fully understand the issues at hand, before proceeding.

While no two agreements will be exactly the same, there are still some common themes or elements that tend to appear over and over in all sorts of service agreements. Some examples of these elements include, but are not limited to, the following:

  • The firm or accountant’s contact information, including the state where he or she is currently licensed to practice. Since each state has unique business regulations and tax laws – California’s, for example, are listed under the California Revenue and Taxation Code – it is vital to obtain business tax services from a CPA who is highly familiar with state-specific rules and protocols.
  • The length or duration of the service agreement. Depending on your needs, an agreement might be ongoing or short-term. At Cook CPA Group, we are committed to tailoring our services to help you meet your objectives – not the other way around.
  • A description of which services are expected to be performed as part of the agreement. For example, the agreement might state that the CPA or accounting firm will perform work such as administering accounts payable or receivable, preparing reconciliations and balance sheets, or helping you comply with yearly reporting requirements. Cook CPA Group offers a wide array of business and tax services to choose from, including services that we have finely honed to meet the needs of specific industries like construction, hospitality, and manufacturing in California. Our accounting and bookkeeping services range from tax planning and preparation to QuickBooks training and beyond.
  • The amount and structure of fees and service charges. For example, the agreement should specify whether fees are charged on an hourly basis, monthly basis, or some other schedule as defined in writing.
  • The circumstances under which the agreement may be terminated, and how such termination would impact the parties involved.

Personal and Business Accounting Services in Sacramento and Roseville, CA

At Cook CPA Group, we have more than 20 years of experience providing audit, bookkeeping, tax, and accounting services for small businesses and individuals. Proudly serving Californians throughout the Roseville and Sacramento regions, our skilled and efficient business consultants are here to make issues like tax compliance, business bookkeeping, and estate planning for your family easier. To learn more about the personal and business tax, accounting, and bookkeeping services we provide in California, contact Cook CPA Group online today, or call our CPA firm at (916) 432-2218 to get started.