What Is an Independent Contractor Agreement for Accountant?

An independent contractor agreement for accountant and bookkeeper is an important document to determine, for tax purposes, that the worker is not an employee of the company. Besides its value when it comes time to file tax returns, it provides a clear understanding of the roles, responsibilities, and administrative duties that you expect from the accountant or bookkeeper and helps eliminate misunderstandings that may arise.

Also known as an accounting contract, bookkeeper contract agreement, bookkeeping services contract, or simply a bookkeeper agreement, it can also be used to list any services that you do not want the accountant/bookkeeper to perform. Should questions arise at a later date as to exactly what the job entailed, having a contract that was negotiated between you and your independent contractor accountant/bookkeeper will be the source for putting the record straight.

Why Use an Accounting Contract

There are several instances when an independent contractor agreement for an accountant or bookkeeper is a good option:

  • If you are the accountant or run an accounting business and need an existing document when negotiating a contract with a new client. Although there are always changes that might occur, working from a contract that clearly defines your services and that you are familiar with can help make sure your interests are protected.
  • If you are setting up a new business and do not have the capital on hand to hire full-time staff to handle your bookkeeping and accounting needs, an accounting contract can help you define exactly what you expect of your consultant and serve as a guide when interviewing prospective candidates for the position. You will also want to keep the executed contract for your records.
  • If you are an individual seeking help with your taxes and you simply want everything in writing.
  • If you are looking to hire an accountant on a full-time basis and want to operate from an existing framework in order to specify services and establish work requirements.

Why Is an Accounting Contract Necessary?

An accounting contract does more than just lay out the duties and responsibilities of the accountant or bookkeeper brought on as an independent contractor. It creates an understanding of what is expected from the individual or company bringing the contractor on board as well, such as providing timely and complete financial records and receipts in order for the contractor to do their job. It also protects the legal rights of both parties.

As is always recommended when drawing up any kind of legal document, both parties can be well served to consult a qualified attorney with experience in independent contractor contracts. They can help with negotiations, but at a minimum they will see to it that the basic requirements of any accounting contract are included.

  • Name and address of accountant or accounting firm, as well as state certification, if any.
  • Name and address of client.
  • Duration of the contract.
  • Scope of work.
  • Scope of exclusions.
  • Payment terms.
  • Termination specifics.
  • State under which contract law will be applied.

Common Features of an Accounting Contract

There are several components of an accounting contract that require special attention. These are:

  • Compensation: In addition to regular compensation, accountants sometimes also receive incentives based on the income they personally generate. This feature is always a matter of negotiation.
  • Expenses: Determining what is a legitimate business expense or a personal one is often a matter of interpretation when hiring consultants. For instance, will there be meal or travel allowances? Will the hiring party be responsible for paying for supplies or perhaps even postage?
  • Health insurance:  In some cases, especially in a long-term accountant contract, the hiring party may offer inclusion in the company’s health care plan, subject to certain conditions.  Usually though, not having to pay health care premiums is one of the reasons hiring a consultant is attractive to many businesses.

Both parties should pay careful attention to record keeping. In most cases, the independent contractor is responsible for paying all employment taxes and must make sure that the employer has filed the Form 1099 with the IRS to account for compensation earned. The employer should keep detailed work records because the IRS could determine that the consultant was actually a paid employee of the company based on the number of hours worked.

To learn more about an independent contractor agreement for an accountant and bookkeeper, you can post your legal need on UpCounsel’s marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.