Written procedures for a bookkeeping firm

Published 6 October 2026. Updated 6 October 2026.

What written procedures are for

Written procedures are the firm's own account of how it handles the recurring parts of the work: how transactions are categorized, what counts as complete documentation, when the books close, who answers what. They do two jobs. They make the work consistent across everyone in the firm, and they give you something concrete to point to when a client asks "why did you do it that way?"

A reply that says "our procedures, section 2, say only complete mileage entries are counted" is hard to argue with. A reply that says "we usually do it this way" invites an argument.

The sections below are a practical outline. They are not legal text, and the exact scope depends on your engagement letters and your jurisdiction, so check those with your own advisors.

An outline that works

1. Scope and who is who

State what the firm does and does not do for a typical client, and who in the firm answers which kinds of question. One paragraph, pointing to the engagement letter for specifics. This is the section you will quote when a client asks for something outside the arrangement.

2. Document and record requests

List what you need and in what form. Receipts, invoices, mileage logs, bank statements, payroll reports. For each, say what makes it usable. For a mileage log, for instance, say what each entry must hold (such as the date, the destination, the business purpose and the miles) and what you do with entries that lack one. What the tax rules require of a log is a question for the client's tax preparer.

3. Categorization rules

This is the section clients ask about most. Write one rule per recurring situation:

• how you treat purchases for a specific job or project
• how you treat spending that may be personal
• the threshold above which an item is recorded as an asset rather than an expense, if you use one
• how uncategorized items are handled at close, and for how long they may sit

Word each rule so that a reader outside the firm can follow it. "Materials bought for a named job are posted to Job Materials once we hold the invoice or a job name; until then they stay in Uncategorized" is quotable. "Use judgment on materials" is not.

4. Timing and cutoffs

When month-end and quarter-end close, how late items are handled, and what happens to a transaction dated inside a closed period. Clients often ask about this only after a report has gone out, so be explicit about when reports are final.

5. Reconciliation

What you reconcile, how often, and what you tell clients when an account does not agree. Include how unmatched items are listed and who resolves them.

6. Answering client questions

How the firm replies to questions by email, and which topics are not answered by email at all. Topics worth considering for a list that always goes to the owner or to the client's tax preparer, EA or CPA: amended returns, notices from a tax authority, audits and penalties. Whatever your list is, write it down so every reply follows it. Also record whether replies carry a short notice that they are not tax advice.

7. Retention and privacy

How long files are kept, where they are kept, and who may see them. Check your local requirements and your retention policy rather than copying a number from another firm.

Writing rules so they can be quoted

1. One idea per sentence. A rule with three conditions in one sentence gets misread.
2. Name the account or the document. "Job Materials", "the client's mileage log", not "the usual place".
3. Say what happens when the condition is not met. "If no job name is given, the item stays in Uncategorized until the end of the month."
4. Number the sections. The reply can then say "section 3" and a colleague can find it.
5. Date the document. A rule quoted from last year's version should be recognisable as such.

Testing your procedures

Take the last ten client questions you answered. For each, find the sentence in your procedures that decides it. Mark the ones where you could not find one. Those are your next additions, and they are also the questions most likely to get a different answer from different people in your firm.

How GroundedReply does this step

GroundedReply treats your written procedures as one of its two sources. You upload the procedures text together with the client's question and a QuickBooks or Xero ledger export. The draft cites the procedure sentence it relies on next to the ledger line, so you can check each rule against your own wording in seconds.

The draft may cite only the ledger lines and procedure sentences you upload, and code checks every figure against the source it cites. If no sentence of your procedures matches the question, no reply is drafted: the job is marked as needing a manual answer, so a gap in your procedures shows up instead of being filled in. Anything about amended returns, IRS or state notices, audits, penalties or legal matters gets a fixed holding reply whatever the procedures say, and so does a topic your procedures tell the firm to escalate or refer to the client's tax preparer, EA or CPA.

Clear, numbered, quotable procedures give it, and you, more to work with. A reply costs 3 credits with no subscription. To see it on your own text, sign up, or read how to answer a categorization question step by step first.

Questions

How long should written procedures be?

As long as it takes to cover the questions clients actually ask, and no longer. Ten clear pages that people read beat forty that nobody opens. Start with the five questions you answer most often and add as new ones come up.

Are procedures the same as an engagement letter?

No. An engagement letter sets the scope and terms of the work with each client. Procedures describe how your firm does the work day to day. The two should agree, and your procedures can point to the letter for scope.

How often should procedures be updated?

Whenever a recurring question exposes a gap, and at least once a year. Put the date of the last update at the top so anyone quoting a rule can say which version they used.