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June 29, 2022

Professional Services Agreement Accounting

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A professional services agreement, or PSA, is a contract between a service provider and their client that outlines the terms and conditions of their working relationship. In the accounting industry, PSAs are common between firms and their clients who require accounting services.

The purpose of a PSA in accounting is to establish clear expectations between the client and the accounting firm. These expectations typically include the scope of services, fees, payment terms, and timelines.

Scope of Services

The scope of services section of a PSA in accounting should clearly state the services the accounting firm will provide to the client. This can include preparation of financial statements, tax planning and preparation, bookkeeping services, and other accounting-related services.

Fees

The fees section of a PSA outlines the costs associated with the services provided by the accounting firm. This can include hourly rates or fixed fees for specific services. The fees should be clearly stated to avoid any misunderstandings or surprises for the client.

Payment Terms

The payment terms section of a PSA in accounting outlines when the accounting firm will invoice the client, when payments are due, and any penalties for late payments. This section should also include information about deposits or retainer fees that the client may need to pay upfront.

Timelines

The timelines section of a PSA in accounting should outline when the accounting firm will provide the services to the client. This can include deadlines for preparation of financial statements, tax returns, or other accounting-related services. This section is important to establish clear expectations and deadlines for both the client and the accounting firm.

In conclusion, a Professional Services Agreement is a crucial document that helps accounting firms to establish clear expectations with their clients. This agreement helps reduce misunderstandings and friction that could occur between the two parties while outlining the scope of services, fees, payment terms, and timelines. Accountancy firms should ensure that they have a well-drafted PSA in place to help enhance their relationships with clients.

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