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In this SOP video for managed service providers, Karl discusses the importance of service agreements, highlighting seven reasons to create or update these documents. He emphasizes that a service agreement is not merely about the services offered; instead, it defines the client-provider relationship and sets the tone for future interactions. It reflects the company’s branding and professionalism, outlining mutual expectations. Additionally, having a contract helps manage tax obligations, which are increasingly scrutinized globally. Overall, the service agreement is crucial for establishing a solid foundation in the client relationship and ensuring compliance with regulatory requirements.