Should you use a contract for your services?

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This article examines reasons why insisting on a contract may not be the best thing for your accounting and bookkeeping service.

You’ve finished your marketing presentation to your most promising potential client. They’re impressed with your confidence, energy, and offer. They’re ready to say “yes.” Do you pull out your bookkeeping service contract, or not?

In most cases, the answer is “Not.”

Most experienced freelancers have learned (the hard way) that small business owners avoid contracts – almost to the point of paranoia. They’ve heard all the horror stories where businesses signed a contract – any contract – and lived to regret it. Taking out the contract right now may kill the deal.

Not only does it put the potential client relationship in jeopardy, but you have to consider what value the contract is, anyway.

To begin with, the service contract simply formalizes your verbal agreement with the client. You can accomplish this just as well with a letter to the client, called an “Engagement Letter,” which you prepare and send when you return to your office. This one page letter, on your company letterhead, thanks the client for their time, lists the services you’re to offer, and restates your monthly fee.

Secondly, since you will pick up the set-up fee before you do any work, then request payment from the client upon delivery of financial statements, your greatest potential loss is one month’s billings. So the contract isn’t required for payment purposes, either.

Finally, since you guarantee their satisfaction, you’re taking all the risk. If they don’t like your work, they’re not going to pay for it – contract, or not.

However, on occasion a client might ask for a contract for their records, and legal peace of mind. If that be the case, here’s a contract form you can customize to fit your business and services. To download this form, click here.

 

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