Engagement letter for business clients
General terms of Engagement
Thank you for your instructions to attend to the accounting and taxation requirements for your business entities and for your family. A list of the entities and individuals for whom we are to act (the Group) is set out in the accompanying Schedule A and our comments below are directed to all those persons.
This letter sets out our terms of engagement and the scope of the work to be performed by us within that engagement. Please read it carefully and if you have any queries or wish to discuss any aspect, do not hesitate to contact us.
We set out below our understanding of the terms of the engagement.
Purpose and scope of engagement
The purpose of the engagement would be for the completion or assistance in the completion of any item noted in Schedule B.
Basis of engagement
We shall now outline the basis of our engagement. It should be noted at the outset that as a general proposition we rely upon our clients to provide us with accurate and timely information to enable us to properly perform our engagement obligations. Consequently, any rectifying work performed by us on the basis of incorrect or late information will be work which is additional to the scope of our engagement.
1. Accounting & record keeping
In undertaking this engagement, it is understood that you will generally ensure that:
- The bookkeeping for all business entities is maintained on a regular basis. In fact, we recommend that bookkeeping and record-keeping tasks to be attended to each week.
- Reconciliations for the bank accounts, debtors and creditors are performed at the end of each month for each of the business entities.
- A stocktake will be performed during the last weekend in June for each entity that deals in trading stock.
In respect of the personal tax returns for you and your family, it is expected that all relevant information will be collected and forwarded to our office by 30 October each year. We shall detail more specific requirements in respect of the individual tax returns later in this letter.
2. Taxation Services
In engaging us to provide taxation services, it is important for you to understand that:
- You are responsible for the accuracy and completeness of the particulars and information provided to us by you.
- Any advice we provide is only an opinion based on our knowledge of your particular circumstances.
- You have obligations under the self-assessment regime to keep full and proper records in order to facilitate the preparation of accurate returns.
3. No statutory financial audits are conducted
You are responsible for the maintenance of the accounting systems and internal controls for all the business entities. Our firm is not being engaged to conduct a statutory audit of the financial records.
Before we lodge any returns on your behalf, we will forward the documents to you for approval. We will endeavour to ensure that the returns are lodged by the due dates and will advise you at the beginning of the financial year when documentation should be provided to us. If you are late in providing information, we will do our best to meet the time limits, but we will not be responsible for any late lodgment penalties and/or general interest charges you may incur.
5. Ownership of documents
The financial statements, tax returns and any other documents which we are specifically engaged to prepare, together with any original documents given to us by you, shall be your property. Any other documents brought into existence by us, including general working papers, the general ledger and draft documents will remain our property at all times.
If our services are terminated, we shall be entitled to retain all documents owned by you until payment in full of all outstanding fees. Where copies of any documents released to you are required for our records, you will be charged for the cost of photocopying at our normal rates.
6. Document Retention
All records are kept at our premises for a period of 1 year and then archived for a further 4 years. Documents will be destroyed after 5 years unless we are specifically requested not to do so. There will be a cost for both retrieving documents from archives and for holding the documents for more than 5 years.
7. Previous Returns
We note we are not engaged to review the accuracy of any previous returns lodged by your organization including that of the trustee/s and/or beneficiaries and therefore disclaim all responsibility.
8. Overdue Returns
We will forward any correspondence received from the Australian Taxation Office that relates to overdue and outstanding Income Tax Returns to you. Unless specifically requested by you, if returns remain overdue for a period of two years or more (including the current tax year), then we reserve the right to, without notice, remove the file and any related parties from our tax agent listing.
9. Additional services
Our agreed fee is only for the preparation and lodgment of the accounting and taxation matters detailed above. Naturally, this fee includes the checking and forwarding of original assessments and original payment notices that are received from the Australian Taxation Office and the Australian Securities & Investments Commission (ASIC).
However, any additional services or advice that your request is not included in this agreed fee. These services will be charged on the basis of the time and degree of skill and acumen required to complete the task undertaken by us, including any direct out of pocket expenses. Please note, any correspondence from the Australian Taxation Office or ASIC that does not relate to initial assessments nor original payment notices, will be treated as additional services.
10. Professional Fees and Payment
Our professional fees for the services provided will be based on the time and degree of skill and acumen required to complete the tasks undertaken by us, including any direct out-of-pocket expenses.
Each client in the Group in jointly and severally liable to pay our fees in respect of all work performed for all members of the Group.
Accounts for services provided will be forwarded monthly for payment as work in progress. Payment is required within 7 days, unless special alternate arrangements are made with us.
Any accounts unpaid after 30 days will incur an administration fee to recover costs associated with telephone calls and reminders for request of payment. Any accounts unpaid after 60 days may be referred to an independent debt collection service. Any associated collection fees (including gst) charged are to be paid by the Group. It is acknowledged and agreed that in keeping with our normal policy we will list all defaulting accounts (including all directors and other signatories to this agreement) with our credit agency, which could result in this default remaining on your credit file for a period of up to five years if unpaid.
11. Credit Assessment
It is acknowledged and agreed that Zimsen Partners Pty Ltd may conduct a Credit Assessment on any entity or individual listed in the Group.
12. Quality Review
As a Fellow of the National Institute of Accountants (NIA) I am subject to periodic quality assurance reviews. Unless otherwise advised by yourself, by engaging our firm, you are consenting to your files possibly being part of such a quality review.
13. Information relating to your affairs
Our firm may from time to time use the services of third party contractors to perform some of the services we are engaged to perform for you. Each client in the Group hereby authorises us to disclose information relating to that client’s affairs to all such third party contractors as we may choose to engage to perform such work.
Where we use the services of third party contractors, we are nevertheless responsible for the conduct and activities of those contractors and for the delivery of the services we are engaged to perform for you.
From time to time our firm and our third party contractors may engage external IT service providers (including in relation to ‘cloud computing’ services) in the performance of services under this engagement. Each client in the Group hereby authorises us and our third party contractors to disclose information relating to those clients’ affairs to all such external IT service providers as we or our third party contractors may choose to engage.
We may also need to disclose information relating to one client’s affairs to other clients in the Group to assist in performing our work, or to a professional body of which we are a member in relation to a quality review program undertaken by that body. Each client in the Group hereby authorises us to do so when we consider it appropriate to further our performance of work for the Group, or when required by that professional body.
14. Safe Harbour
With effect from 1 March 2010, a new regime for the regulation of tax agents has taken effect under the Tax Agent Services Act 2009 and accompanying legislation (TASA). The new regime has implications for registered tax agents and their clients.
An important feature of TASA is the provision of a “safe harbour” protection from penalties in certain circumstances for taxpayers who engage registered tax agents.
To obtain the benefits of “safe harbour” protection, the legislation requires the taxpayer to provide the registered tax agent with “all relevant taxation information” to enable accurate statements to be provided to the Australian Taxation Office. This requirement may be important to both parties in identifying and understanding the purpose and scope of the engagement as set out below and may also affect other matters discussed below.
You will find further discussion on the “safe harbour” protections in the document titled “Safe Harbour – Clients’ rights and obligations under the taxation laws” available on our website www.zimsenpartners.com.au
15. Limitation of liability
Our firm’s liability may be limited by a scheme approved under Professional Standards Legislation.
We aim to provide the highest standard of professional service and are focused on the concerns of our clients. If for any reason you feel you have not received the level of service expected or have an issue to raise, please contact myself to discuss how the problem may be resolved.
17. Changes to Terms of Engagement
We advise that our terms of engagement are available on our website. Any future changes to these terms will not be advised in writing but will instead be uploaded on our website www.zimsenpartners.com.au
We advise clients to check our website for any changes to these terms and contact us if they have any questions.
We shall now outline the basis of our engagement in the context of the specific services to be provided:
As the BAS returns are prepared monthly or quarterly and lodged during the financial year, it is not possible for this firm to review the correctness of the underlying financial information as part of the preparation of the monthly or quarterly BAS return.
Therefore, for the BAS returns preparation, we will rely on and process financial information provided to us without any review of the primary source documents. In doing that, we will make the following specific assumptions:
- The financial information provided to us is accurate
- The financial information correctly states the GST position.
- You have the necessary supporting documentation to satisfy the Australian Taxation Office for GST purposes.
- You hold valid tax invoices and adjustment notes for all expenditure incurred by you in respect of which an input tax credit is being claimed.
Should any discrepancies arise between the monthly or quarterly lodgements and the year end reconciliations, we will discuss the need to correct either the BAS returns and/or financial accounts.
This firm has been engaged to prepare the annual financial accounts of the business entities in your group. This service includes the preparation of:
- A profit and loss statement;
- A balance sheet; and
- Notes for the above accounts.
This service includes maintenance of the charts of accounts for the general ledgers of your business entities.
These accounts are prepared specifically for your taxation services use only and should not be provided to third parties.
Income tax returns
This firm has been engaged to prepare and lodge income tax returns for the business entities in your group and for your family.
This firm will not be responsible for reviewing or verifying any financial records or statements provided to it either via manual cashbooks or prepared on accounting software such as MYOB or Quickbooks. Correct coding or classification of accounts is outside the scope of this engagement. If assistance is required in how to correctly code or to review how you currently do so please discuss this with us. This will entail work which is outside the scope of this engagement and will be charged as additional services.
Also please ensure that you have all source documentation available to allow this firm to analyse the income tax implications of any transaction, if we request to see it. Whilst we will not as a matter of course be looking at these documents, the ATO will expect you (and you are required) to have them available before any claim is made in your income tax return. We may in some circumstances also request to see source documents if a tax issue is particularly contentious.
It is also expected that, in respect of individual income tax returns, each person will have the necessary documents so as to comply with the substantiation provisions of the Income Tax Assessment Act.
We will specifically advise as to the requirements of the substantiation provisions relating to your income tax return and of the necessity to obtain acceptable receipts as specifically required by the legislation. We will not, however, be checking that the requirements of the substantiation provisions have been satisfied.
This specifically means that we will not be reviewing your log book or any calculations or information you provide us, for example a rental property schedule either prepared by you on spreadsheet or by a property manager. If you require assistance in completing a log book or preparing any calculations or you would like us to review such work, please discuss this with us. This will entail work which is outside the scope of this letter and will be charged as additional services.
From time to time, this firm prepares templates and schedules to assist with the collation of information to complete income tax returns.
These will be provided free of charge.
The fee for this service does not cover any inquiries made to us or investigations involving us conducted by the Australian Taxation Office. Substantial penalties apply for an incorrectly prepared income tax return. If you have any queries in respect to this, please contact our office for assistance.
Each client in the Group agrees that we can bank into our trust account tax refund amounts received on behalf of that client and can deduct from those amounts any fees owed to us either by that client or by any other member of the Group.
Fringe benefits tax returns
This firm has also been engaged to prepare and lodge the FBT returns for your business entities.
It is necessary to revert to the source documentation to allow this firm to analyse the FBT implications of any transaction.
This firm has also been engaged to attend to the income tax compliance work for your superannuation fund.
With respect to the annual audit of the SMSF this office will make arrangements for the audit to be undertaken by an external party whereby you will be billed directly and liable for all costs associated with the completion of the audit.
In addition to the basic financial information required to complete these requirements, it is expected that the source documentation will be available to allow this firm to analyse the implications of any superannuation related transaction.
You should also note that the deeds of the fund should be annually reviewed by a superannuation specialist to ensure they continue to comply with the requirements of the SIS Act. Our engagement does not extend to the provision of such legal advice and our fee does not include this service. We are happy to recommend the services of a superannuation specialist for this task.
Our fee does not include financial planning services for the investments of the superannuation fund or for any planning advice for your future retirement planning needs.
This service does not cover any inquiries made by or investigations conducted by the Australian Taxation Office.
The directors consent to the registered office of the company being changed to care of Zimsen Partners Pty Ltd, Factory 7, 31 Fiveways Boulevard, Keysborough, Vic 3173 and understand that by giving this consent, the Annual Review will be electronically sent to Zimsen Partners Pty Ltd. The annual fee for this service is $160.00 plus gst and includes the safekeeping and maintenance of the corporate register including notifying asic of change of business addresses and officeholder/shareholder addresses.
Confirmation of Engagement
We thank you for the opportunity to provide accounting and taxation services to you and your business and we look forward to developing a close accounting relationship with you for many years to come.
If you are in agreement with the engagement and the guarantee as set out herein, please arrange to sign and return the attached duplicate letter to us.
For Zimsen Partners Pty Ltd
Agreement with Terms of Engagement
We, «contact» hereby agree to the terms of the engagement letter dated «date» of Zimsen Partners Pty Ltd as its accountant and adviser as set out in this letter of engagement.
Guarantee and Indemnity
It is our requirement that you guarantee the payment of all accounts for professional fees, including out-of-pocket expenses rendered by us from time to time as set out in the form of guarantee on the attached duplicate letter.
We, «contact», in consideration of Zimsen Partners Pty Ltd providing accounting and advisory services agrees to:-
a) the terms as outlined in the engagement letter relating to professional fees and payment, and
b) guarantee the due and punctual payment to Zimsen Partners Pty Ltd of the professional fees and out-of-pocket expenses payable by the Group to Zimsen Partners Pty Ltd.
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Director/shareholder of trustee company
- Prepare & lodge Business Activity Statements (BAS) returns YES/NO
- Prepare & lodge Instalment Activity Statements (IAS) returns YES/NO
- Prepare interim financial statements YES/NO
- Prepare annual financial statements YES/NO
- Prepare & lodge income tax returns YES/NO
- Prepare & lodge annual Fringe Benefits Tax (FBT) returns YES/NO
- Prepare & lodge annual ASIC returns YES/NO
- Assistance with general account & management YES/NO
- Taxation Planning YES/NO
- Estate Planning YES/NO
- Business Acquisitions/Sales YES/NO
- Payroll Tax advice YES/NO
- Fringe benefits tax advice YES/NO
- Capital Gains Tax advice YES/NO
- Workcover YES/NO
- Superannuation Guarantee YES/NO
- Finance Applications YES/NO
- Business Valuations YES/NO
- Preparation of business plan YES/NO
- Cashflow Analysis & Planning YES/NO
Zimsen Partners Pty Ltd hereby discloses that it has direct/indirect equity and financial interest in the undermentioned business ventures and as such may receive income by way of a fee, benefit, commission, reward or profit distribution in addition to accounting fees that Zimsen Partners Pty Ltd may charge you.
Zimsen Partners Pty Ltd may also (unless specifically requested not to) exchange information with these associated firms as and when needed to in the provision of services to yourself/your business.
- Professional Group Holdings Pty Ltd
- Associated Professionals Group Pty Ltd
- Strategic Property Alliance Pty Ltd
- Simple Strategic Solutions Pty Ltd
- Zimsen Audit Services Pty Ltd
- Solidaire Accounts Management Pty Ltd
- Solidaire Lending Pty Ltd
- T.M. Design Group (Aust) Pty Ltd
- Lyttletons Lawyers Pty Ltd
The above list is correct as of 1/7/2015.
Should you wish to access accurate and current information, please visit our website
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