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Accounting Consulting Agreement Template (w/Retainer)

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An accounting consulting agreement (with retainer) is a contract that establishes a working relationship between a client and a consultant hired to advise on accounting matters. Before entering into this arrangement, the parties will discuss the tasks to be performed by the consultant, the length of the agreement, the amount of compensation, whether a retainer must be paid, and other important terms and conditions.

A consulting agreement does not create an employer-employee relationship; the consultant is considered an independent contractor and will be responsible for their own taxes, unemployment and workers’ compensation, insurance, etc. Remaining independent allows the accountant to hire their own staff, create their own schedule, and generally control the manner in which they perform services for the client.

What is an Accounting Consultant?

An accounting consultant advises individuals and companies to help create and maintain efficient general accounting practices. Sometimes a consultant will be hired to resolve a specific concern, while other times they will be overseeing a number of problematic areas. Therefore, a consultant’s services may be required only for a short period of time, or the relationship between the parties may be more open-ended (in which case, a retainer fee may be proposed).

Common Services

In a general sense, accounting consultants provide services to reform, recover, or upgrade an entity’s accounting systems, finances, budget, profitability, bookkeeping, regulatory compliances, cash flow, and other matters relating to the accounting department. They may also be asked to fill in for a CFO, Controller, or other high-level financial agent who is absent or was recently terminated.

More specifically, accounting consultants who can provide the following services are in high demand:

  • Policy and technical GAAP accounting
  • Accounting system evaluation
  • General ledger consolidation
  • Forensic accounting
  • Internal audits
  • Accounting software implementation and integration
  • Audit, risk, SOX (Sarbanes-Oxley)
  • Compliance with International Financial Reporting Standards
  • Financial Accounting Standards Board compliance:
    • ASC Topic 606 – revenue recognition
    • ASC Topic 842 – leases and new rules for lease accounting
  • Enterprise resource planning, general ledger, and business information systems support

How do Accountants Consultants Charge?

Accounting consultants may charge clients by time spent, i.e., an hourly rate paid on a weekly, monthly, or quarterly basis. However, it is most common for these consultants to demand a fixed fee for their services. This enables them to charge for the value of their expertise, rather than by time spent on a particular task. In addition to payment in exchange for services, up-front pricing may be provided to establish a more concrete relationship between the parties; this is referred to as a retainer.

Should a Retainer be Used?

A retainer is a fee paid by a client to a consultant to reserve the use of their services over a specified period of time. The money will count towards the consultant’s hourly wage or fixed fee, but any additional time spent performing services will require additional compensation by the client. Establishing a retainer arrangement can be beneficial for both parties; the consultant is paid up-front so their compensation is temporarily solidified, and the client is able to take advantage of their expertise whenever the need arises.

Frequently Asked Questions

What's the difference between an accountant and an accounting consultant?

Whereas accountants handle a business’s financial affairs generally, a consultant will be brought in to provide their expertise on specific issues that are hindering the company’s overall efficiency, financial accuracy, or profitability. The accounting department of a business will use the consultant’s insight and analysis to improve accounting practices that are currently in place.

What are the requirements of becoming an accounting consultant?

Generally speaking, an individual would need a bachelor’s (but preferably a master’s) degree in finance, business, accounting, economics, or a similar field to become an accounting consultant. It’s also common for consultants to become a licensed CPA (Certified Public Accountant). It’s important to note that qualifying as a CPA may require additional credits beyond a bachelor’s degree, such as completion of an advanced accountancy course or a master’s degree.