How to Create a Client Contract as a Freelancer
Are you wondering how to create a contract for your bookkeeping business? This may also be referred to as a letter of engagement or a client agreement.
For a freelancer or independent contractor, this is an essential legal document for you to give to your bookkeeping client to sign when you begin working with them.
Topics I will cover in this article that you will want to include in your employment contract are: who’s involved, start date, scope of work, price, payment method, and termination terms. I will also share resources where you can find, buy, or create a contract of employment.
Watch the video here, or keep reading!
What to Include in a Client Contract for Freelance Bookkeepers
Most bookkeepers are not familiar and comfortable with complex legal language and that is okay. It is fine for this contract to be in everyday words and everyday writing so that it is easy for everyone to understand. Headers and bullet points work great!
Here is an example of a client contract for freelance workers from Freelancer Map. I like this contract because it is simple and easy to follow. I will break down each part of their contract below.
Who’s involved and length of contract
The first thing that you will want to include in your contract is who does the contract involve. In this case it will be you and your bookkeeping client.
You will also want to include when the contract starts and the term date. Hopefully, the term date is indefinitely, but this may not always be the case for all the services you provide.
Scope of work/description of services
Next you will want to list what services you will be completing for your client. This might include things such as:
Categorize income and expenses
Input bills and print checks weekly
Reconcile bank statements monthly
Send monthly financial reports
Rate and payment method
Rate and payment are an important part of an engagement letter between you and your client. You want to make sure you are putting everything applicable that has to do with price and payment in your contract before you start working for them.
For a larger fixed rate service, for example to clean-up a client’s messy books, you would write out the exact cost. If you charge $2000 for this service, you can write, “Initial clean-up is $2000”.
However, maybe after the clean-up you are going to be providing monthly bookkeeping services, for $500 a month. You will want to detail this along with the services you will be providing after the clean-up is completed.
After you list the price of the services being completed, you want to include when the client will be paying you and how the client will be paying you. Are they paying you weekly or monthly? Are they paying you by automatic bank transfer, invoice, or check? These are all options that you and your client will want to discuss and include in your contract.
Terms and Conditions
Most likely your contract will not have a termination date, but if you are doing a one-time project or service, you will want to include the end date in your contract.
Be sure to include a blurb that talks about how you, as a bookkeeper, are not responsible for errors. I’ve also seen it recommended that you mention if the client doesn’t give you accurate or enough information, you are not liable.
Resources for Onboarding Clients
Bookkeeper Business Coach
When starting your bookkeeping business, I recommend that you create an LLC and work as an independent contractor for different clients. This will allow you to diversify and be in control of your business. After you obtain your business license and before you take on clients, I recommend you create your contract or letter of engagement.
In my course, Bookkeeper Business Coach, I walk you through the steps on how to start a bookkeeping business. In this class, I also provide you with a contract that you can use when onboarding new clients.
My course is currently $150, which may be a good option for you if you are planning to invest in a lawyer to help you write a contract for your bookkeeping business. In my course, not only do you get a client agreement you can personalize, but you also receive guidance through all the steps you need to take in order to get your business up and running in 30 days.
Error & Omission Insurance
E&O insurance is a good way to protect yourself. Oftentimes, whoever is providing the insurance will offer a discount if you have a contract. Having a client contract shows that you are putting processes in place to protect yourself.
Bookkeeper Launch
Bookkeeper Launch is very thorough and will guide you through the process of becoming a bookkeeper and starting your bookkeeping business.
Bookkeeper Launch suggests you give a proposal or plan to your potential client. They recommend you do this live or in person and to not send the document via email.
This little presentation you give is meant to answer all of the client’s questions and show them how you will benefit their business. When going through the client contract with the potential client, be sure to include all of the ways you are going to help them. After the client says “yes” to working with you, then you send them the letter of engagement.
Bookkeeper Launch will give you all the templates you need in order to do this!
Hello Sign
In today’s digital world, Hello Sign provides a professional way to present your contract to your client.
This online program allows you to upload your contract and place text boxes on the document where your client needs to sign and date. Hello Sign will then send your client an email, asking them to sign the document by typing in their signature and approving it.
Once everything is completed, Hello Sign will send you and your client a copy of the signed contract.
Making a legal document as an independent contractor can be intimidating, but hopefully this will have given you a bit of encouragement!
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