Engagement Letters are customary across both the accounting and bookkeeping industries, and help to make clear a number of key aspects of the professional relationship, such as:

• The parties to the engagement;
• The scope of the engagement;
• The period of the engagement;
• The obligations of each party;
• Information relating to your affairs;
• Pricing of services;
• Ownership of documents and software.

These Terms confirm our understanding of the nature and the limitations of the services we will provide.

WHO YOU ARE ENGAGING

The entity you are engaging for bookkeeping services is Parrhesia Pty Ltd trading as Business Angels, which holds BAS agent number 26181340.

As required by the Tax Agent Services Act 2009, we hold professional indemnity insurance to the level specified by the Tax Practitioners Board (TPB).

Our firm, or persons within our firm, hold the following professional memberships:

• Member of Australian Bookkeepers Network www.austbook.net.

PERSONS & ENTITIES COVERED BY THIS ENGAGEMENT

Our engagement extends to the following persons and/or entities:

• Kate O’Mara (Principle Bookkeeper),
• Various Business Angels Staff as required.

SCOPE OF ENGAGEMENT

As a licenced BAS Agent, we are engaged to provide you with bookkeeping services and advise you on BAS / GST matters.

Our engagement extends to the following services in this proposal.

• Bank Reconciliations- Processing Bank Feed Transactions, or importing statements in lieu of a Bank Feed;
• Accounts Payable Data Entry, Reconciliation and preparation of Bank Files for supplier payments;
• Accounts Receivable Data Entry, issuing Debtor Statements, Debt Collection and receipting of Debtor payments;
• Payroll calculation and pay run preparation including STP filing;
• Preparation of monthly business reports;
• Preparation & Lodgement of Business Activity Statements;
• Preparation & Lodgement of Taxable Payments Annual Report;
• Reconciliation and Finalizations of Annual STP;
• Reconciliation of Payroll Liability Accounts and other Balance Sheet Accounts as required;
• Liaising directly with the ATO on your behalf re: BAS/ GST matters including payment plans;
• Liaising directly with your Tax Agent and or Accountant as required.

To be clear, our engagement does not extend to the following services:

• Preparation of income tax returns;
• Preparation of fringe benefits tax returns;
• Variation of PAYG instalments and FBT instalments that appear on business activity statements;
• Technical advice on matters of income tax or fringe benefits tax law;
• Dealing with the ATO on your behalf on matters relating to tax agent services;

For services that lay outside of our scope of engagement, and for any other matters that we advise as being beyond our sphere of expertise, we recommend that you contact your registered tax agent.

PERIOD COVERED BY OUR ENGAGEMENT

Our engagement will be taken to have commenced from the point in time that this engagement letter has been signed and returned to us, unless an alternative future commencement date is agreed to by both parties.

Unless a limited engagement period has been agreed to by both parties, our engagement will be taken to continue indefinitely until either party terminates the engagement.

BOOKKEEPING ISSUES THAT RELATE TO THE PERIOD OF TIME PRIOR TO OUR ENGAGEMENT

We will not be responsible for the accuracy of information entered prior to the commencement of our engagement. Sometimes, our ability to perform our services will be hindered by the inaccuracy or incompleteness of information prior to the commencement of our engagement, with some common examples being:

• Bank accounts, credit cards or loan accounts that have been unreconciled for a period of time;
• Bank accounts, credit cards or loan accounts that harbour erroneous unreconciled deposits and payments;
• Debtor, creditor and inventory subsidiary ledgers that have not been agreed to the general ledger for a period of time;
• Outstanding business activity Statements that require lodgement;
• GST and PAYG control accounts in the general ledger which harbour unexplained opening balances;
• Chart of accounts that have been poorly structured.

If we identify any such issues, we will discuss these with you. Broadly speaking, we can adopt two approaches:

• Leave the issue for your tax agent to deal with. (Where the issue relates to problematic general ledger or subsidiary ledger balances, this usually entails transferring problem amounts to a ‘suspense’ account); or
• Investigate and resolve the issue for you.

If you choose the second option, we will be only too pleased to assist; however, our time in resolving the issues will be charged at our standard rates.

OUR OBLIGATIONS UNDER THIS AGREEMENT

Our conduct as a BAS agent is regulated by the Tax Practitioners Board (TPB) and by the Code of Professional Conduct (Code), a legislated code that sets out the professional and ethical standards required of tax agents and BAS agents.

The Code imposes a number of core principles on BAS agents, including:

• Honesty and integrity;
• Independence;
• Confidentiality;
• Competence;
• Other responsibilities, including upholding the proper administration of taxation laws, maintaining professional indemnity insurance, and responding to requests and directions from the TPB.

By visiting the TPB’s website at www.austbook.net, you can find out further information about the TPB and the Code. You can also access an online BAS agent register, where you can view our BAS agent registration details.

For a client, one of the benefits of using a BAS agent is the ability to make use of the so-called ‘Safe Harbour’ provisions. Broadly, this means that ATO penalties will no longer apply to you where:

• a false or misleading statement is made carelessly, provided you have taken reasonable care;
• to comply with your tax obligations by giving your BAS agent the information necessary to make the statement;
• a document (such as a return, notice or statement) is not lodged on time in the approved form due to a BAS agent’s carelessness, provided you gave the agent the necessary information in sufficient time to lodge the document on time and in the approved form.

YOUR OBLIGATIONS UNDER THIS AGREEMENT

It is expected that the source documentation and transaction data will be made available to us as and when requested, in a timely manner.

• We will not be responsible for any errors brought about by your failure to provide information, documentation or material that is later found to be material to your Bookkeeping requirements.
• You are responsible for the timely provision of information and we will not be responsible for any consequences brought about by your failure to act in a timely manner.

It is your responsibility to make all relevant information available to us in a complete and timely manner.

In order to maintain accurate and complete financial records for you, we may seek clarification of some matters where there is a need to do so, however we will not audit the information provided by you.

WHEN RECORDING TRANSACTIONS WE WILL

• assume that all income is reflected in the records that you provide to us, or provide us with access to. If income is received in other ways, it will be your obligation to make us aware of this;
• assume that all capital purchases and expenses can be substantiated, and in the case of any such items costing greater than $82.50, we assume that a valid tax invoice is held.

There are civil penalties for false and misleading statements made to the taxation authorities or for actions which obstruct the proper administration of taxation laws.

As our firm is not being engaged to conduct a statutory audit of the financial records, we will not express an opinion as to the truth and fairness of the financial statements

INFORMATION RELATING TO YOUR AFFAIRS

We may, from time to time, use the services of third-party contractors to perform some of the services we are engaged to perform for you and your entities. You hereby authorize us to disclose information relating to your and your entities’ affairs to all such third party contractors as we may choose to engage to perform such work. Where we use the services of third-party contractors, we are nevertheless ultimately responsible for the conduct and activities of those contractors and for the delivery of the services we are engaged to perform for you and your entities.

Additionally, from time to time, we and our third party contractors may engage external IT service providers (including “cloud computing” providers such as MYOB / Xero etc.) in the performance of services under our engagement with you and your entities.

You hereby authorize us and our third-party contractors to disclose information relating to your and your entities’ affairs to all such external IT service providers as we or our third-party contractors may see fit.

HOW WE PRICE OUR SERVICES

Our fees are based on a time and materials billing method, otherwise known as “do and charge”.

This means at the start of each new month you will be invoiced for the time spent doing your work plus any direct out of pocket expenses (such as software subscriptions ect) for the month prior.

We are committed to delivering value-for-money and our prices will be periodically reviewed in line with market forces and CPI. We will advise you in advance if our prices change.

Invoices are issued on a monthly basis (in arrears) for clients in “maintenance phase”.

For new clients with back log work , invoices are rendered on a periodic / project milestone basis.

On either invoicing basis, we require our fees to be paid by the due date stated on our invoices.

OWNERSHIP OF DOCUMENTS AND SOFTWARE

The Tax Practitioners Board (TPB) has provided practical assistance and explanation on the subject of BAS agents claiming a lien over client property in instances where there may be outstanding fees owing by the client to the BAS agent. Our firm has adopted the TPB’s recommendations.

The following items are said to likely belong to the client irrespective of whether there are outstanding fees owing to the BAS agent:

• source documents e.g. ledgers, receipts, invoices and journals;
• correspondence between the ATO and the client;
• software licensed in the client’s name.

The following items are said to likely belong to the client only where there are no outstanding fees owing to the BAS agent for labour expended in respect to these items:

• letters of advice, books of accounts, returns and financial statements;
• the accounting software file containing the client’s data.

Working documents of the BAS agent would not belong to the client unless the client specifically instructed the agent to prepare such drafts for them and had paid for them.

STAFF AND CONTRACTORS

Our firm may utilise different employees and/or contractors to carry out our engagement with you. Our employees and contractors have signed agreements in place with us which preclude them from accepting employment or contracting directly with a client.

You should always feel free to raise directly with us any questions or concerns that may arise in relation to the persons we assign to our engagement with you.