What should accountants include in their Client Agreement?

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Table of Contents

• Service Performance
• Limited Liability
• Confidentiality
• Client Obligations
• The relationship as contractor
• Tax Return Inspections
• Conclusion

As an accountant, it’s important that you enter into a written contractual agreement with those customers that you are providing services to. The most common agreement is a Client Services Agreement. A Client Agreement sets out the terms and conditions of your relationship with each client and is a legally binding contract.

The following article will provide some guidance on the most essential features to be covered in the Client Agreement.

Service Performance

Your Client Agreement should contain a number of terms that relate to service performance.  While this provision allows you to demonstrate your commitment to high levels of client service, it also holds you accountable if the level of service falls below the agreed standard. Your business lawyer should draft this provision so that it states you will provide all the services in a timely and efficient manner, with the necessary expertise and skill.

In the same vein, however, your ‘Service Performance’ clause should also hold the client accountable by requiring them to cooperate in a timely manner throughout the term of the Client Service Agreement.

Limited Liability

To limit your costs and exposure to legal claims, your business lawyer should insert a carefully worded provision that reduces liability costs for claims arising from tort, contract or any other claims.

Confidentiality

In addition, the Client Agreement should explain your commitment to protecting your client’s confidential information.  Within this clause should be an explanation of what information is considered confidential and what information is not. It is also imperative that you ensure your business is being compliant with the Australian Privacy Principles wherever applicable.

Client Obligations

Your business lawyer should also include a clause that deals with the obligations of your client.  In particular, this section should state whether or not the customer has an obligation to:

• Provide all information and documents necessary to perform the task;
• Ensure that all information is accurate, up to date and true; and
• Make prompt decisions when needed to help the accountant complete the task.

The relationship as contractor

Your terms should clarify that you will be engaged as a contractor and clarify what the broad legal obligations of this relationship entail. If you are an independent contractor, your Client Agreement should explain that:

• You are able to perform services for other business during this engagement;
• You have the sole right to direct the manner, means and method of how the services are performed; and
• You have the right to use employees and contractors to complete the services required.

Tax Return Inspections

Your Client Agreement needs to state that all income tax returns in Australia are subject to examination by the Australian Taxation Office.  Have your business lawyer explain here that the clients will be obliged to hand over any material which are needed to substantiate items in their tax return and that this may result in the client being charged in further fees wherever more work is required.

Conclusion

A Client Agreement is a very useful document that assists in a broad range of ways when dealing with clients. If you need to discuss having a Client Agreement reviewed or drafted, you should speak to a business or contract lawyer to protect your legal and financial interests. Get in touch with LegalVision on 1300 544 755 to get a fixed-fee quote.