Terms from our client agreement

• Amendments and Adjustments: Changes made to financial records or filings after submission due to new information or corrections. May incur additional fees.
• Arbitration: A dispute resolution process involving a neutral third party who makes a binding decision.
• Auto-Payment: A recurring monthly payment method required to ensure uninterrupted bookkeeping services.
• Cancellation Fee: A charge applied if the client terminates the agreement early, calculated as per the terms outlined in the contract.
• Client Tasks: Responsibilities assigned to the client, such as providing access to accounts, submitting required documents, and responding to requests.
• Confidentiality: The obligation to protect client data and restrict its access to authorized individuals or systems.
• Deferred Revenue: Payments received in advance for goods or services that have not yet been delivered or performed; recorded as a liability until fulfilled.
• Dispute Resolution: The process of resolving conflicts through arbitration or other agreed-upon methods.
• Engagement Agreement: A formal contract defining the scope, responsibilities, and terms of the relationship between the client and the bookkeeping firm.
• Exclusions: Specific tasks or services explicitly not included in the scope of the agreement, such as legal advice or QuickBooks training.
• Fees: Charges for services, including setup, monthly, and year-end fees, as well as additional costs for optional or extraordinary services.
• Independent Contractor: A non-employee status that applies to the bookkeeping firm, emphasizing that it operates independently and assumes responsibility for its own taxes and liabilities.
• Liability Limitation: A clause restricting the extent of damages either party can claim in the event of errors, omissions, or disputes.
• Monthly Fee: The recurring charge for regular bookkeeping tasks as outlined in the agreement.
• Mutual Non-Disclosure Agreement (NDA): A provision ensuring that both parties protect shared proprietary or confidential information from unauthorized disclosure.
• Proprietary Information: Confidential business data, methods, or intellectual property that one party shares with another under the agreement.
• Recurring Tasks: Ongoing bookkeeping activities, such as transaction categorization, reconciliations, and payroll journal entries.
• Setup Tasks: Initial bookkeeping activities required to bring the client’s financial records current, such as reviewing prior records and reconciling accounts.
• Tax Filing Policy: Guidelines outlining deadlines, responsibilities, and procedures for ensuring accurate and timely tax filings.
• Term: The duration of the agreement, typically renewed annually unless terminated with proper notice.
• Termination Clause: Provisions specifying how either party can end the agreement, including notice periods and associated fees.
• Uncategorized Deposits: Deposits that require clarification from the client before being categorized in financial records.
• Year-End Fee: An additional charge covering tasks performed at the end of the fiscal year, such as preparing 1099s, reconciling annual reports, and coordinating with tax preparers.

---

Services not offered by Sound Bookkeepers:

• Providing Business Operation Advice: Guidance on improving business practices.
• Calculating or Paying Estimated Taxes: Handling tax payment to the IRS.
• Support for Software Integrations or General Usage
• QuickBooks training: Teaching usage of QuickBooks.
• Legal Advice: Any form of legal consultation or interaction with lawyers on your behalf.
• Handling of Legal Disputes: Involvement in resolving disputes that require legal expertise.
• Employee Interaction: Direct dealings with client employees.
• Updating or Renewing Business Credentials such as licenses and permits.
• Investment Decisions: Advising on investments or managing investment portfolios.
• Credit Repair Services: Assisting with improving credit scores or negotiating with creditors.
• Insolvency Advice: Guidance on bankruptcy or financial restructuring.
• Insurance Selection and Management: Helping choose/manage business insurance
• Updating Sales Tax Rates: Keeping sales tax rates updated in QuickBooks/POS/CRM
• Manage entity and licensing renewals

---

Optional services which may be added on:

1. Predictive Analytics: Advanced data analysis for future predictions.
2. Budgeting and Forecasting: Detailed financial planning and projections.
3. One on One Meetings (beyond standard support)
4. Custom Reporting Beyond Standard Financial Statements.
5. Job Costing: Tying income and expenses to specific jobs.
6. Managing Commingled Accounts: Sorting personal and business finances.
7. Audit Representation: Representing your business in audits or legal proceedings.
8. Accounts Receivable: Creating or sending invoices or applying payments.
9. Accounts Payable: Creating or paying bills or applying payments.
10. Payroll: Managing payroll in any way except for the journal entry

---

Terms used in general bookkeeping

Accounts Payable (AP)
The amounts a business owes to suppliers for goods or services received but not yet paid for.

Accounts Receivable (AR)
The amounts owed to a business by customers for goods or services provided but not yet paid for.

Accrual Basis Accounting
A method of accounting where income and expenses are recorded when they are earned or incurred, regardless of when payment is received or made.

Assets
Resources owned by a business that have economic value, such as cash, equipment, inventory, and real estate.

Balance Sheet
A financial statement that provides a snapshot of a business’s financial position, showing assets, liabilities, and equity at a specific point in time.

Bank Reconciliation
The process of matching a business’s financial records with its bank statement to ensure accuracy and identify discrepancies.

Bookkeeping
The process of recording, organizing, and maintaining a business’s financial transactions.

Cash Basis Accounting
A method of accounting where income and expenses are recorded only when cash is received or paid.

Chart of Accounts (COA)
A structured list of a business’s accounts used to organize financial transactions.

Cost of Goods Sold (COGS)
The direct costs of producing goods or services sold by a business, such as materials and labor.

Depreciation
The process of allocating the cost of a tangible asset over its useful life.

Equity
The owner’s claim on the assets of a business after all liabilities are deducted.

Expenses
The costs incurred by a business in the process of generating revenue.

Fiscal Year
A 12-month period used for accounting purposes, which may or may not align with the calendar year.

General Ledger (GL)
A record of all financial transactions of a business, organized by account.

Gross Profit
The revenue of a business minus the cost of goods sold.

Income Statement (Profit and Loss Statement)
A financial statement showing revenue, expenses, and profit or loss over a specific period.

Inventory
The goods and materials a business holds for sale or production.

Journal Entry
A record of a financial transaction in the accounting system.

Liabilities
Obligations a business owes to others, such as loans, accounts payable, or taxes.

Net Income
The total profit of a business after all expenses and taxes are deducted from revenue.

Operating Expenses
The regular costs of running a business, such as rent, utilities, and salaries.

Payroll
The process of calculating and distributing wages to employees, including deductions for taxes and benefits.

Reconciliation
The process of ensuring that financial records agree with bank statements or other external sources.

Retained Earnings
The portion of net income not distributed to owners or shareholders and reinvested in the business.

Revenue
The income a business earns from selling goods or services.

Trial Balance
A report showing the balances of all accounts in the general ledger to check that debits equal credits.

Working Capital
A measure of a business’s short-term financial health, calculated as current assets minus current liabilities.

1099
A tax form used to report income earned by independent contractors and other non-employees.

W-2
A tax form provided to employees showing their annual earnings and tax withholdings.

W-2
A tax form employees fill in to determine their federal tax withholdings.