The clauses an accounting services contract should settle before any work starts

An engagement should tell both parties what will be done, which evidence is needed and what happens when circumstances change. This checklist is orientation for contracts governed in England and Wales, not a substitute for legal or professional review.

What to take away

1. Correct legal parties

Name the practice entity and every customer entity receiving work. Trading names are not enough. Record addresses, authorised contacts and who may approve changes.

Example clause: The Customer confirms that the entities named in Schedule 1 are the only entities entitled to receive the Services.

Status: good practice. Omit it and the wrong company may be billed or served.

2. Exact service and period

List bookkeeping, payroll, accounts, returns, advice, filings and reports separately. State the accounting and tax periods. Avoid "all accounting support" unless every included task is defined.

Example clause: The Services are the bookkeeping, payroll and VAT return tasks listed in Schedule 2 for the periods stated there.

Status: good practice. Omit it and scope disputes can lead to unpaid extra work.

3. Customer records and cut-offs

Describe the source records, format, quality and delivery dates required. Explain how missing, late or contradictory information affects price and timetable. State who confirms estimates and business judgements.

Example clause: The Customer will deliver complete bank statements and invoices by the cut-off stated in the contract.

Status: good practice. Omit it and late records can delay accounts and change the fee.

4. Practice review and completion

Identify preparation, supervision and approval stages. Define completion through a delivered report, approved payroll, accepted submission or other evidence. Clarify that an electronic acknowledgement does not validate every input.

Example clause: Completion occurs when the practice delivers the final accounts and the Customer approves them in writing.

Status: good practice. Omit it and sign-off and payment triggers remain unclear.

5. Fees, tax and payment

Give the price or calculation, VAT treatment, invoice timing, payment date and additional-work process. Separate onboarding, record repair, software and recurring service. The Small Business Commissioner's contract guide provides business-to-business orientation on scope, parties, payment, termination and disputes.

Example clause: Fees are the amount stated in Schedule 3 plus VAT, invoiced monthly and payable within the period stated there.

Status: good practice. Omit it and payment timing and extra work become disputed.

6. Authority and submissions

State who may communicate with HMRC or Companies House, what authorisation is needed and who approves final information. Never ask a client to share personal sign-in credentials. Preserve the submitted version and receipt.

Example clause: Only the individuals named in Schedule 4 may instruct HMRC or Companies House on the Customer's behalf.

Status: good practice. Omit it and unauthorised filings may occur.

7. Confidentiality and data roles

Describe permissible use, access and disclosures. Determine controller and processor roles for each activity from the facts. Where a processor contract is required, the ICO's detailed guidance identifies topics such as instructions, security, subprocessors, assistance, deletion and audit. The page is under review, so check the live version.

Example clause: The Practice will process personal data only on the Customer's documented instructions and will assist with data subject requests.

Status: confidentiality duties are good practice. Processor terms are legally required under UK GDPR where the practice processes personal data on the customer's behalf. Omit them and the practice can breach Article 28.

8. Responsibility and liability

Allocate reliance, customer decisions, insurance, limits and exclusions clearly. Liability clauses can engage statutory controls and need legal advice. Do not hide a material restriction behind an undefined cross-reference.

Example clause: The Practice's total liability for the Services is limited to the fees paid in the period stated in the contract, except for fraud or death or personal injury caused by negligence.

Status: good practice. Omit a clear cap and the liability limit may be unenforceable or read against the drafter.

9. Complaints, disputes and correction

Provide a usable complaint route, response process and any professional-body escalation that genuinely applies. Explain how errors and amended submissions are handled, including customer cooperation and cost where lawful.

Example clause: The Customer will raise complaints in writing, the Practice will respond within the period stated in the contract, and either party may refer the dispute to mediation.

Status: good practice. Omit it and disputes may escalate without a route or evidence.

10. Termination and handover

Set notice, immediate termination events, final fees, record return, data retention, software access and cooperation with a successor. Plan for deadlines falling during the transition.

Example clause: Either party may terminate on the notice period stated in the contract, and the Practice will return or delete Customer records on request.

Status: good practice. Omit it and exit, data return and final fees become disputed.

Distinguish business and consumer customers

The CMA's fair contract guidance concerns trader-to-consumer terms and notices, and explains that a person may act as a consumer in one transaction and a trader in another. A sole trader buying services for the business is not automatically a consumer. Obtain advice on the actual relationship rather than reusing one template indiscriminately.

Example clause: The Customer confirms that it is acting in the course of business and not as a consumer.

Status: consumer law is legally required where the customer is a consumer. Omit it and unfair terms rules may apply without warning.

Before signature, compare the agreement with the proposal, privacy information, price page and sales conversation. Resolve contradictions in writing. Store the accepted version and later variations so the service team can work from the same terms the customer approved.

Operate a variation register

Client circumstances can change between signature and delivery. Record each change in a register with these fields:

Oral discussions should be confirmed in a durable record.

At each renewal, compare actual work with the schedule, remove obsolete services and add recurring exceptions deliberately. Check whether legal or consumer status changed, then sample completed files for evidence each party met its stated responsibilities.

Where a clause conflicts with law, insurance or a professional rule, hold the amendment for qualified review; do not improvise commercial wording.

Before you act

Common questions

Which clauses are legally required?

Processor terms are legally required under UK GDPR where the practice processes personal data for the customer. The other clauses are good practice unless consumer law or professional rules apply.