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For bookkeepers and bookkeeping teams

A Canadian bookkeeping engagement letter that stops the scope drifting

Bookkeeping is the engagement most likely to grow quietly. The letter is where you decide, in advance, what "and could you just…" costs.

A bookkeeping engagement letter is the agreement between a bookkeeper and a client that fixes the monthly cycle, the volume the fee covers, what happens above it, and who files what. It is the document that keeps prior-period clean-up, GST/HST filings and payroll questions from becoming unpaid work. The template below is a complete letter, free in Word and PDF.

Last reviewed against 3 primary sources.

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Bookkeeping engagement letter

The full letter in Word and PDF, written for Canada, including the volume and clean-up clauses.

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Type in your firm, the client, the scope and the fee, and it writes a complete engagement letter for Canada, ready to print or save as a PDF. Nothing you type is stored.

Next step: send it to the client through FirmHello, where it stays on their record beside everything else they send you.

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A monthly bookkeeping engagement starts as bank reconciliation and payables. Eighteen months later it includes chasing receipts, a GST/HST filing, payroll questions and a tidy-up of the two years before you arrived — usually at the original fee.

None of that is the client behaving badly. It is what happens when the only written description of the work is a quote from a year ago. The letter below is written to be specific about the cycle, the volumes, and what falls outside them.

Some firms call this document a bookkeeping contract or a bookkeeping agreement, and some a bookkeeping letter of engagement. The name does not matter; the contents do. The sample below is written as a letter because a client reads a letter, and it binds both sides once they have agreed to it.

What a bookkeeping letter has to pin down

Four things separate a bookkeeping letter that holds from one that gets renegotiated every spring.

  1. 1

    The cycle, not just the service

    Monthly, quarterly, or weekly — and by when. "Monthly bookkeeping" without a closing date is an invitation to send you a shoebox in January for the whole year. Put the day the client's records are due in the letter, and a client portal for accounting firms can ask for them on that day every month.

  2. 2

    Volume, and what happens above it

    Transactions, bank accounts, employees on payroll. Firms that price bookkeeping without a volume assumption are pricing a guess. Say what the fee assumes and what a material change triggers.

  3. 3

    Prior-period clean-up, explicitly excluded

    The single most common unpaid work in bookkeeping. Opening balances that do not agree, an unreconciled year, a chart of accounts someone invented. Exclude it, then quote it separately when you find it.

  4. 4

    Who files what

    Be explicit about GST/HST, payroll filings and the T2 corporate return: which of them you prepare, which you review, which you file, and which remain entirely the client's.

The bookkeeping engagement letter

Written for Canada. The downloads are the same text, as a Word document to edit and a PDF to put on your letterhead.

[Firm letterhead]

[Date]

[Client name]
[Client address]

Dear [Client contact],

The engagement

We will maintain the books and records of [Client name] on a [monthly / quarterly] basis, beginning [date]. Each period we will record and categorise transactions, reconcile [number] bank and credit card accounts, maintain accounts payable and receivable, and produce [management accounts / a trial balance] within [number] working days of receiving complete records.

What the fee assumes

The fee below assumes approximately [number] transactions a period, [number] bank accounts, and [number] employees on payroll. If the actual volume differs materially and consistently, we will agree a revised fee with you rather than absorb it or invoice you by surprise.

What is not included

This engagement does not include correcting the records of any period before [date], preparing or filing the T2 corporate return or any personal return, GST/HST registration or filing, payroll processing, or advice on accounting systems — unless separately agreed in writing.

If we find that opening balances or prior periods need work before we can proceed, we will stop, tell you what we have found, and quote for it separately.

Your responsibilities

You will provide bank statements, invoices, receipts and payroll information by [day] of each [month / quarter]. You remain responsible for the accuracy and completeness of the underlying records, for authorising payments, and for the final accounts and filings.

Where records arrive late, our timetable moves accordingly and any additional work is charged at [rate].

The limits of this work

This is a bookkeeping engagement. It is not an audit, a review, or a compilation of financial statements, and it will not necessarily detect fraud or error. We perform it in accordance with the CPA Canada Handbook.

Fees

[Amount] in Canadian dollars per [period], invoiced [when], payable within [number] days. Work outside the scope is charged at [rate] per hour and agreed with you first.

Ending the engagement

Either of us may end this engagement on [number] days' written notice. On termination we will provide your records and data in a usable format; our working papers remain ours. Fees for work completed remain payable.

Confidentiality and your data

We keep your information confidential, hold it in accordance with PIPEDA or its provincial equivalent, and retain it for [number] years after the engagement ends.

Agreement

Please sign and return a copy.

[Name], [Firm name]

Agreed for [Client name]:

Signature ______________________ Date ____________

Before you use this

Supplied as-is, with no guarantee. These templates are general information, not legal advice, and not a substitute for it. Have your own legal adviser review and adapt one to your practice and your jurisdiction before you put it in front of a client. FirmHello accepts no responsibility or liability for any use made of them.

What changes for a bookkeeping engagement in Canada

Bookkeeping sits outside Canada's compilation standard entirely: CSRS 4200 does not apply to an engagement to perform bookkeeping, or to an accountant contracted as a controller. That leaves the letter as the only document that defines the work.

What it has to reflect instead are the CRA's rules on the client's records: how receipts support GST/HST claims, and where the books are allowed to live.

Receipts that support an ITC

The CRA's documentation for input tax credits rises in tiers. Under $100 needs the supplier, date and total; from $100, the GST/HST charged and the supplier's registration number; from $500, the buyer's name, a description and the payment terms. Say who chases missing details.

The four-year window on ITCs

Most registrants must claim an input tax credit by the due date of the return for the last period ending within four years of when it could first be claimed. Say whether reviewing unclaimed credits from earlier years is in scope or a separate quote.

Books kept in the cloud

The CRA expects records kept at a place of business or residence in Canada unless it gives written permission, and says electronic records held abroad and accessed from here are not kept in Canada. Record where the client's ledger software actually stores the books.

Who keeps the originals

The duty to keep business records for six years belongs to the client, even when the only organized copy sits with you. Say what you return when the engagement ends, and in what form, so the records outlive the relationship.

Where bookkeeping engagements go wrong

The clean-up nobody quoted

Two unreconciled years surface in week three. Without an exclusion the argument is about whether it was implied; with one it is a quote.

Volume creep

The client's business doubles, the transaction count doubles, the fee does not. A stated assumption makes that a conversation rather than a grievance.

The filing nobody owned

A GST/HST deadline passes because each side believed the other was handling it. Name the filings and name the owner.

Other engagement letters

What it is Engagement letters Accounting Accounting Tax preparation Tax preparation

Questions bookkeepers ask

Is a bookkeeping engagement letter the same as a bookkeeping contract?

In substance, yes. A bookkeeping contract, a bookkeeping agreement and an engagement letter all record the same terms: the work, the fee, what the client supplies and how either side ends it. The letter form is the convention in accounting practices because clients read it, but it is a contract all the same once the client has agreed to it. Have your own adviser review the version you send.

Do I need a separate letter for each entity?

Usually yes. Two companies with the same owner are two clients with separate records and separate liabilities. One letter covering both is difficult to enforce and awkward if the relationship with one ends.

How often should a bookkeeping letter be reissued?

Annually for recurring work, and immediately whenever the scope changes materially — a new entity, a payroll, a system migration. The letter should describe the work you are doing now, not the work you were quoted for.

Can I include a price increase clause?

Many firms do: a stated annual review, or an index. What matters is that it is specific enough to apply without a negotiation, and that the client saw it before they signed.

Does this cover compiling financial statements?

No, and that is deliberate. A compilation is a different engagement with its own standard (CSRS 4200) and its own wording. Issue a separate letter, or a clearly separate section, for that work.

Sources

The primary sources this page is written against, last read against it on . Check them before relying on a detail; rules and thresholds change.

  1. Government of Canada Business records
  2. CPABC CSRS 4200
  3. Government of Canada ITC documentation tiers (<$100, $100–$499.99, $500+) and four-year claim limit for most…

What changed

  • Added an editable Word (.docx) copy of the letter beside the PDF.
  • Added the section on what Canadian law adds, written from primary sources, and reviewed the shared letter text for wording that only US law supports.

The letter is the easy half

Sending it, getting it back signed, and finding it again in two years is the half that eats the week. That is what the portal is for.

No card and no sales call. If you would rather tell us about your firm first, use the longer form.