SmartBooks Launches SmartBooks Genie Software to Improve Accounting Firm Efficiency Learn More

Terms of Service

This Terms of Service Agreement (the “Agreement”) is made by and between the Client listed below and SmartBooks Services, LLC (“SmartBooks”), as of the date (the “Effective Date”) on which it has been signed by both SmartBooks and Client (each individually  a “Party” and collectively the “Parties”), who agree as follows:

  1. TERMThe term of this Agreement shall begin on the Effective Date and end on the effective date of termination under section 8 below.
  2. SERVICESThis Agreement shall govern all goods and services (collectively, the “Services”) that SmartBooks may provide or sell to Client including any goods and services procured from third parties.  Services shall be defined and priced in a Statement of Work (“SOW”); in the absence of a SOW for certain services, prices for those services shall be defined by SmartBooks’ standard price list. SmartBooks may change the terms and conditions or pricing of any Service with no less than 30 days prior written notice to Client, in which case Client may terminate service within 30 days of receiving such notice without penalty if agreement on revised Services is not reached.
  3. PAYMENTFees for Services and any associated sales tax shall be due and payable in full as specified in a SOW, and SmartBooks which may charge Client a finance charge of one and one-half percent (1.50%) per month on balances for which payment has not been received by the due date, excluding balances for which Client has submitted a written dispute.  If Client disputes any portion of the invoice, Client agrees to pay the undisputed portion of the invoice and to submit a written claim within 30 calendar days of receipt of the invoice documenting the reasons the remaining amount is disputed. Failure by Client to submit a written dispute within 30 days of invoice receipt shall be deemed final agreement with and acceptance of all Services and charges on the invoice.  Client authorizes SmartBooks to initiate ACH and credit card charges for Services payable by ACH or credit card.  Client shall be liable to SmartBooks for all reasonable fees and expenses, including but not limited to reasonable attorney’s fees and litigation costs, that SmartBooks incurs to collect amounts owed.  Client agrees to reimburse SmartBooks for all reasonable and ordinary expenses incurred by SmartBooks in delivering Services to Client, such as but not limited to parking and accounting software technical support cases as itemized on Client’s invoices.
  4. WARRANTY AND LIMITATION OF LIABILITY.

(a)        Warranty. SmartBooks warrants to Client only that, at the time performed, all Services provided under the applicable SOW shall be performed in accordance with reasonable industry practices and shall conform in material respects with the description of Services contained in such SOW (the “Warranty”). Client’s sole and exclusive remedy, and SmartBooks’s sole and exclusive liability, for a breach of the Warranty shall be, within 30 days after receipt of prompt written notice from Client of such breach, the repair or re-performance of the applicable defective Services that are covered by the Warranty.  The Warranty is conditioned on SmartBooks receiving prompt written notice from Client of each Warranty claim, no later than 30 days after SmartBooks originally performed the defective Services. ALL OTHER REPRESENTATIONS, WARRANTIES AND GUARANTIES OF SMARTBOOKS OR OTHERWISE RELATING TO THE SERVICES, WHETHER EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION AS TO FITNESS FOR A PARTICULAR PURPOSE, ARE DISCLAIMED BY SMARTBOOKS AND EXCLUDED FROM THE AGREEMENT.

(b)        Third Party Items.  For any goods or services produced or delivered by third parties and recommended, provided or sold by SmartBooks to Client, including but not limited to software, software hosting services, bill payment services, payroll and benefits processing services, CFO and HR advisory services, tax filing and remittance services, and document management services (“Third Party Items”), Client agrees that such third parties are and shall be solely responsible for the performance, quality, merchantability, fitness for any general or specific use, and for any and all warranty coverage for such goods and services, and that SmartBooks is not and shall not be liable for any warranty (and makes and shall make no warranty) concerning such goods and services.  Further, SmartBooks shall not have any responsibility or liability for any damages or losses resulting from any defect or failure of such Third Party Items recommended, provided, or sold to Client, nor for any alleged or actual breach of contract, breach of warranty, negligence, or other misfeasance or malfeasance by any third party that provides any Third Party Items.  Client agrees to pursue all performance, defective product, quality, negligence, breach of contract,  breach of warranty, misfeasance or malfeasance or other claims related to any Third Party Items against the third party producers and providers only and not against SmartBooks.

(c)        Limitation of Liability.  TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL, MULTIPLE, OR PUNITIVE DAMAGES OF ANY KIND, INCLUDING, WITHOUT LIMITATION, LOST PROFITS, EVEN IF ADVISED OF THE POSSIBILITY THEREOF. THE SOLE EXCEPTIONS TO THE PRECEDING SENTENCE SHALL BE FOR BREACH OF THE EXPLICIT PROVISIONS IN THIS AGREEMENT GOVERNING INDEMNIFICATION, CONFIDENTIALITY, AND ONE PARTY’S HIRING OF THE OTHER PARTY’S EMPLOYEES (BUT ANY ALLEGED OR ACTUAL BREACH OF CONFIDENTIALITY RESULTING FROM A DATA BREACH OR HACK CAUSED BY A THIRD PARTY SHALL NOT BE AN EXCEPTION TO THE PRECEDING SENTENCE).   The Parties agree that, except in the event of willful misconduct or breach of confidentiality not involving any third party hack or data breach, in no event and under no legal theory, cause of action, or claim of liability or damages, shall SmartBooks be liable to Client for any damages, losses, expenses or attorney’s fees that in the aggregate exceed the fees paid by Client under this Agreement to SmartBooks for Services provided  to Client under this Agreement  (excluding Third Party Items) in the six months immediately preceding the date that Client first asserts in writing a claim for damages against SmartBooks.  In the case of an assignment of this Agreement as to Specified Services to a SmartBooks subsidiary under Section 10(c) below, the liability and damage limitation in the preceding sentence shall be construed to be the aggregate amount of fees paid by Client for Specified Services (as defined in Section 10(c) below), excluding Third Party Items, in the six months immediately preceding the date that Client first asserts in writing a claim for damages against the SmartBooks subsidiary.

  1. RELIANCE ON CLIENT.  The Parties agree that in order to deliver Services SmartBooks relies on information and instructions provided to it by Client. “Reliance Consequence” shall mean any adverse impact on Client, SmartBooks or any third party resulting from delivery of Services by SmartBooks in reliance upon information or instructions provided by, or without the knowledge of information or instructions withheld by or not timely provided by, Client or Client’s owners, directors, officers, employees, CPA, CFO, attorney, agents, affiliates, or other service providers of Client. Client shall be estopped from pursuing a claim against SmartBooks and its directors, officers, employees, agents and affiliates relating to any Reliance Consequence. Client shall  indemnify and save harmless, as well as defend at Client’s sole cost, SmartBooks and its directors, officers, employees, agents and affiliates from and against any and all third party claims, demands, suits or actions (including but not limited to any investigation, administrative action, fine and/or case brought or assessed by any governmental agency) relating to a Reliance Consequence. Client understands that the fields in which SmartBooks may provide Services have legal, audit and other compliance requirements.  Should client conduct a non-compliant practice or policy, Client shall be estopped from pursuing any claim against SmartBooks and shall indemnify and save harmless, as well as defend at Client’s sole cost, SmartBooks and its directors, officers, employees, agents and affiliates against any and all third party claims, demands, suits or actions (including but not limited to any investigation, administrative action, fine and/or case brought or assessed by any governmental agency) resulting from, arising out of or relating to Services delivered by SmartBooks associated with the non-compliant practice or policy of Client.
  2. CONFIDENTIALITY.

(a)        GeneralConfidential Information” means all information or data furnished by either Party (“Disclosing Party”) to the other Party (“Receiving Party”) which Receiving Party should reasonably understand to be considered Confidential Information by Disclosing Party, including but not limited to, information regarding Disclosing Party’s customers, employees and vendors, product and service information, operational data, and financial data and performance results. All Confidential Information, unless otherwise specified in writing, shall remain the property of Disclosing Party. Confidential Information does not include (and each Party shall have no obligation with respect to) information that (i) is in the public domain, through no fault of Receiving Party, at the time of the disclosure hereunder; (ii) prior to disclosure hereunder is within the legitimate possession of Receiving Party; (iii) becomes known to Receiving Party from a third party without restriction and without violation of law or breach of any confidentiality obligation owed to Disclosing Party, which violation or breach was known or should reasonably have been known to Receiving Party; (iv) is independently developed by Receiving Party through parties who have not had, either directly or indirectly, access to or knowledge of such Confidential Information as supplied by the Disclosing Party; or (v) is approved for release by written authorization of Disclosing Party.

(b)        UseReceiving Party shall only use Confidential Information for the limited purpose of this Agreement and shall hold the Confidential Information confidential and, except in furtherance of this Agreement, not disclose it to any third party. Each Party agrees that it shall exercise reasonable care and adequate measures to protect its own Confidential Information and that it shall exercise no less care to safeguard Confidential Information obtained from Disclosing Party. Such measures shall include, at a minimum, a requirement that all Confidential Information shall be retained in a secure place with access control systems. Upon termination of Services, SmartBooks will provide Client electronic copies of its accounting workpapers, assist with the transition of third party systems to Client administrative access, billing and/or ownership, and remove copies of Client’s Confidential Information from SmartBooks’ active client files.  SmartBooks’ backup systems and document retention procedures may retain copies of this information, with access to SmartBooks backup systems limited to SmartBooks management, employees with IT responsibilities, external IT service providers, and legal counsel.

(c)        Required DisclosureIf Receiving Party is required by any subpoena, court or governmental agency order, legal process, law or regulation to make any disclosure of Confidential Information, Receiving Party shall first give prompt written notice of such requirement to Disclosing Party (provided that giving such notice is reasonably possible), shall permit Disclosing Party to intervene in any relevant proceedings to protect its interests in the Confidential Information, and shall provide reasonable cooperation to Disclosing Party, at Disclosing Party’s expense, in seeking to obtain such protection and in seeking to limit disclosure to that portion of the Confidential Information which both parties in good faith reasonably consider to be legally required. Disclosing Party shall reimburse Receiving Party its reasonable attorneys fees and costs incurred in responding to the disclosure demand.

  1. HIRING OF EMPLOYEESWithout the prior written consent of SmartBooks, Client shall not during the Term nor for a period of one year after the termination of the Term, knowingly hire as an employee or engage as a contractor, whether part-time or full-time, any person who then is or at any time in the preceding one-year period was an employee of SmartBooks. Client stipulates and admits that its hiring or engagement of any employee or former employee of SmartBooks is likely to cause irreparable damage to SmartBooks that would be difficult or impossible to ascertain or prove and for which the amount of damages would be difficult or impossible to prove.  Accordingly, each Party agrees that any breach of this section 7 shall obligate Client to pay to SmartBooks on demand, as liquidated damages, an amount equal to that employee’s or former employee’s annual SmartBooks salary in effect on the date of termination of employment at SmartBooks. Each Party agrees that this provision does not provide for unreasonably large liquidated damages.
  2. TERMINATION.   Either Party may terminate this Agreement, for any reason, after the later of a) thirty (30) days prior written notice to the other Party or b) after the completion or termination of all SOWs if any SOW specifies a termination notice period longer than 30 days.  If a Party breaches this Agreement and does not cure such breach within thirty days following receipt of written notice of breach, the other Party may terminate this Agreement by providing written notice of termination. In the event Client is in breach of any payment obligation under this Agreement or any SOW, SmartBooks may stop delivering Services to Client (in which case SmartBooks shall have no liability for failure to provide Services to Client).  Any early termination fees in a SOW shall be deemed liquidated damages reasonable in scope given costs incurred and committed by SmartBooks to deliver the SOW. The following provisions shall survive any expiration or termination of this Agreement: Section 3 (Payment), Section 4 (Limitation of Liability), Section 5 (Reliance on Client), Section 6 (Confidentiality), Section 7 (Hiring of Employees), Section 9 (Force Majeure), and Section 10 (General Terms).
  3. FORCE MAJEURENeither Party shall be liable for any delays or other non-performance resulting from circumstances or causes beyond its reasonable control that are not due to the negligence or misconduct of the Party claiming relief under this Section, including, without limitation, fire or other casualty, act of God, war, terrorism, or other violence, any law, order or requirement of any governmental agency or authority or other causes beyond the reasonable control of such Party.
  4. GENERAL TERMS.
  5. a) Governing Law; Jurisdiction; Venue This Agreement shall be governed by the laws of the Commonwealth of Massachusetts, without regard to its conflict of law rules. The Parties agree to sole venue in the state or federal courts located in the Commonwealth of Massachusetts, and each Party hereby consents to the sole jurisdiction of such courts over itself in any action relating to this Agreement. Any party attempting to bring any suit concerning this Agreement or Services in any state other than Massachusetts shall be deemed to have consented to the dismissal of that suit for lack of jurisdiction and shall be liable to the other party for its reasonable and necessary attorney’s fees and costs incurred in moving to dismiss the suit.
  6. b) Multiple Client Entities.  If Client requests that SmartBooks provide Services to another legal entity wholly or partly owned by Client or under common ownership or otherwise associated with Client, then Client: stipulates that it has signed and agreed to this Agreement both on its own behalf and as an authorized agent for such other entity; shall be deemed to have signed this Agreement as an authorized agent for any such other entity arising in the future; shall indemnify and hold harmless SmartBooks and defend SmartBooks at Client’s sole cost against any claims by the other entity that it was not bound by this Agreement; and guarantees payment obligations for Services provided to the associated entity.
  7. c) Assignment.  Neither Party may assign its rights and obligations hereunder, except: (I) as part of a company reorganization or merger or sale of substantially all of a Party’s assets, and in such case the assigning Party shall provide prompt written notice to the other Party; or (II) SmartBooks may assign this Agreement as to specified parts of the Services (“Specified Services”) to a subsidiary of SmartBooks by giving written notice to Client of the assignment or by issuing an SOW notifying the Client of the assignment.  From and after the date of assignment under clause (II), only that subsidiary shall be responsible for or have any obligation, liability or responsibility to Client under this Agreement with respect to the performance, non-performance or deficient or negligent performance of, or otherwise related to, the Specified Services and/or the Warranty applicable to those Specified Services (with SmartBooks being automatically released and discharged from any responsibility, liability or obligation under or related to this Agreement as it pertains to the Specified Services concerning which this Agreement is assigned to the subsidiary or any Warranty related thereto).  From and after any such assignment to a SmartBooks subsidiary under clause (II), it is possible that SmartBooks may act on a contract basis as an administrator for the subsidiary, but performing that administrative role including but not limited to billing for a subsidiary shall not subject SmartBooks to any obligation, liability or responsibility to Client with respect to that subsidiary’s performance, non-performance or deficient or negligent performance of the Specified Services, the Warranty hereunder regarding the Specified Services, or any breach of this Agreement or breach of warranty claim arising out of the subsidiary’s actions or omissions in connection with the Specified Services.  Upon any assignment of this Agreement under clause (II), the SmartBooks subsidiary shall have and may enforce all of the benefits, liability and warranty limitations and protections of this Agreement that apply to SmartBooks.
  8. d) Integration; AmendmentThis Agreement sets forth the entire agreement and understandings between the Parties with respect to the subject matter hereof and merges all previous and contemporaneous discussions and negotiations between the Parties and supersedes and replaces any other agreement that may exist or have existed between the Parties with respect to the subject matter hereof.  This Agreement may be amended or modified only with the written consent of both Parties; or after 90 days prior written notice from SmartBooks of the amended terms, in which case Client may terminate Services and this Agreement within 90 days of receiving such notice without penalty. If Client does not terminate the Services and this Agreement within 90 days of receiving the notice of amended terms, then Client shall be deemed to have agreed to those amended terms.  Any conflict between the terms of this MSA and an SOW shall be governed by the terms of this MSA, unless the SOW explicitly states that for Services delivered under the SOW, specified terms in that SOW are agreed to be a modification of specified section(s) of this MSA. All other SOWs shall be governed by the terms of this MSA unless also so individually stipulated.
  9. e) Remedies, Waiver and SeverabilityFailure to claim any rights under this Agreement shall not constitute a waiver of any other rights hereunder. Any provision hereof prohibited by law or regulation shall be deemed modified to the minimum extent necessary to be enforceable and shall not invalidate the remaining provisions hereof.
  10. TERM OF ENGAGEMENT.
  11. a) This engagement has a one year Initial Term that shall automatically renew for successive one year Renewal Terms (collectively the “Term”).
  12. b) Client may terminate the engagement effective the last day of the Term by providing written notice 30 days prior to the end of the Term.  During those 30 days, SmartBooks will work to transition responsibilities, documentation, and administration of third party technology systems to another Client service provider or employee.
  13. c) Client may also terminate this engagement at any time; however unless termination is effective on the last day of an Initial or Renewal Term and Client provides 30 days prior written notice to SmartBooks, Client will incur an early termination fee payable upon receipt equal to twice the monthly recurring service fees then in effec

 

  1. SMARTBOOKS COMMITMENTS.
  2. a) Although this SOW is for part-time services, our staff will generally be available to you every business day during normal business hours as urgent needs arise.
  3. b) We will respond to all requests submitted within 1 business day, and process transactions within 1 to 3 business days depending on SOPs with occasional expedited processing upon request.
  4. c) We will complete your monthly close and financial reports, payroll and benefits processing, and tax returns by their respective deadlines provided we get required information from you.
  5. d) We have priced this Statement of Work based on current business activities.  If you experience growth or changes to your needs, we will periodically review required resources and pricing.  We will work with you in good faith to meet increasing needs in a cost effective manner, seeking to leverage efficient systems and technology to mitigate price increases.

 

  1. CLIENT COMMITMENTS.
  2. a) You will respond timely to information requests.  Data affecting the monthly close must be submitted 7 days prior to the target close date in order for us to meet the close date target.  Data affecting payroll and benefits and tax returns must be submitted by established deadlines in order for us to meet processing and filing deadlines.
  3. b) You will proactively discuss contemplated software changes with us, as any software changes related to accounting and payroll  need to be planned with an eye toward scalable, efficient systems, software compatibility issues, and industry best practices. We can help you evaluate technology options.
  4. c) If you are ever unhappy with the services we are delivering, you will let us know right away.  While we periodically ask for feedback, we count on you to be open and forthright with us so that we can respond and provide you the highest possible level of service.
  5. d) You acknowledge Implementation pricing in this SOW includes limited prior period catch up and clean up from the date of our kickoff meeting. Catch up and clean up beyond two weeks, if significant, is estimated at a .25x-.50x multiple on monthly accounting services for each month of prior accounting to be done.  If additional prior period support is required, we will discuss it with you and agree on a fixed fee or hourly estimate prior to performing the work.  In some accounting circumstances, a low cost balance sheet adjustment may be possible.

Bookkeeping and Accounting Services and Payroll, Benefits and HR Services Terms and Conditions:

 

  1. All Bookkeeping and Accounting services are provided by SmartBooks Bookkeeping and Accounting, LLC.  All services are delivered under the terms of the Master Service Agreement, with assignment of all rights and obligations to SmartBooks Bookkeeping & Accounting, LLC to the extent bookkeeping and accounting services are provided.
  2. Payroll, Benefits, and Human Resources Services are provided by SmartBooks Human Resources, LLC.  All services are delivered under the terms of the Master Service Agreement, with assignment of all rights and obligations to SmartBooks Human Resources, LLC to the extent payroll, benefits and human resources services are provided.
  3. Due to cost inflation, on the anniversary date of this SOW pricing is subject to up to a 5% annual price escalation.
  4. Pricing and services may be re-assessed periodically upon request of Client or by SmartBooks based on evolving needs.
  5. Because SmartBooks dedicates significant resources to clients commensurate with the scope of services in this SOW beginning upon signature, fees invoiced and paid are not refundable should clients decide not to continue with some or all contracted services.  In the event of a change of plans, clients are encouraged to discuss with SmartBooks an amendment or cancellation of this SOW in order to avoid incurring undesired costs, subject to the prior notice provisions herein so that SmartBooks resources may be re-allocated to other clients’ work and technology platform costs mitigated.
  6. All fees are payable by ACH initiated by SmartBooks as follows:
    1. Onboarding:  upon delivery of Welcome Letter and Kickoff Checklist
    2. Ongoing fixed price monthly services:  on a monthly cycle, in advance for services to be rendered, beginning on the first business day after the Kickoff Call
    3. Any hourly services or other temporary or project services outside the scope of a fixed fee will be agreed upon with Client and charged on a bi-weekly basis
    4. Year end bookkeeping and accounting services, income tax and audit support: first business day of each fiscal year.  In first year of service, if the prior year’s tax return or audit has not yet been completed and SmartBooks is engaged to support the prior year return or audit, then the year end support fee will be charged when SmartBooks is engaged by Client or Client’s CPA to begin support of the prior year return or audit.
    5. Form 1099:  after preparation of Forms 1099 each year
    6. Annual Payroll and Benefits services: Year end payroll services payable January 2nd.  Benefits open enrollment services payable 30 days prior to open enrollment date.