An accounting agreement letter, also known as an engagement letter, is effectively a shortened and abbreviated contract summarising accounting services and compensation.
Using an accounting engagement letter is common practice in the industry when liaising with new clients.
An accounting contract conversely, is a formal agreement that requires a signature from both the accountant and client.
Accountants use a combination of a letter and a contract depending on what they’re used to doing.
We recommend you use both when engaging with new clients, as the letter is a simple document to interpret while the contract provides legal proof of the commitments each party has made.