Your bookkeeper made an error. Not a typo — a real one. A misclassified GST entry that triggered an ATO audit. A payroll calculation that underpaid staff and exposed you to a Fair Work claim. A missed BAS lodgement that incurred penalty interest. A bank reconciliation that hid a stolen-or-misappropriated amount for months. Whatever the specifics, the cost has landed on your business, not theirs.
Bookkeepers, like other professional service providers, owe a duty of reasonable care and skill. When they breach that duty and you suffer loss as a direct consequence, you can recover those losses. Most bookkeeping firms carry professional indemnity insurance precisely for this reason.
The legal context
Bookkeeping engagements are contracts for services with implied terms of due skill and care. Registered BAS agents are also subject to the Tax Agent Services Act 2009 and the Tax Practitioners Board Code of Professional Conduct. A breach giving rise to direct loss — penalties, interest, remediation costs, additional accountant fees — is recoverable as damages. Where the bookkeeper is incorporated, the company is the contracting party; the principal may also have personal exposure for negligent advice in some circumstances.
Common pushbacks and why they fail
- “You signed off on the BAS.” Client review does not transfer professional responsibility. You engaged them precisely because you are not the expert.
- “Limitation of liability clause.” Many clauses are unenforceable, particularly against small businesses, and they rarely cover gross negligence.
- “The ATO would have caught it anyway.” Causation is about your loss now, not hypothetical futures.
- “You did not provide all the documents.” A competent bookkeeper requests what they need; silence on the bookkeeper’s side is not your fault.
The document and what it does
A Letter of Demand identifies the engagement, the specific errors, the dates and the quantified loss — penalties paid, interest charged, remediation invoices, time cost. It cites the contractual duty and the professional standards breached, and demands payment within 14 days, signalling that the next step is a Magistrates Court claim or, where amounts are substantial, a District Court professional negligence proceeding.
What Claim Done delivers
- The engagement and the duty owed clearly stated
- The errors documented with dates and supporting evidence references
- The loss quantified line by line
- Citation of professional standards where applicable
- Drafted and sent on letterhead, flat $79
What to expect after
Most bookkeeping firms forward a Letter of Demand to their PI insurer immediately. Insurers are commercial — they assess merit and quantum and frequently settle to avoid the cost of defence. Expect a substantive response inside 21 days. If none arrives, a Final Demand ($79) and a court filing keep the matter moving.