The first conversation with a new client usually goes well. They like you, you like them, and you agree roughly what you will do. The trouble starts three months later, when they ask whether you could "also just quickly" do something that was never part of the deal. If nothing was written down, you either do it for free or have an awkward conversation.
A clear proposal and a signed engagement letter solve most of this. They are also a lot less work than most practices think, once the process is set up.
Proposal or engagement letter?
They do different jobs, and many practices send them together.
- A proposal says what you will do and what it costs. It is the thing the client says yes to.
- An engagement letter sets out the terms: who is responsible for what, how you will work together, and how either side can end the arrangement.
If you send them as one document, the client signs once, and you have a single record of what was agreed.
What goes in an engagement letter
Every practice is different, so treat this as a starting list rather than a template to copy word for word:
- The services you are providing, described specifically (for example, "monthly bookkeeping" and "quarterly BAS preparation", not just "accounting help")
- What is not included, so extras are obvious when they come up
- Your fees, and how often and how they are billed
- What you need from the client, and by when (bank access, receipts, payroll details)
- Who is responsible for what, including the client's responsibility for the accuracy of what they send you
- How you will communicate and how quickly you normally reply
- How either party ends the arrangement, and how much notice is needed
- How you look after the client's information
This is general information, not legal advice. Check what applies to your registration and your clients with your professional body, and have your own template reviewed if you are unsure.
Price in packages, not in hours
The easiest way to stop scope creep is to sell defined packages at a fixed price: what is included, what it costs each month, and what happens if the client wants something outside it. When an extra request arrives, you are not negotiating from scratch. You point to the letter and quote the extra.
Where the time actually goes
The writing is not the slow part. The slow part is everything around it:
- Rebuilding the letter for each new client
- Emailing a PDF, then following up when it is not signed
- Filing the signed copy by hand
- Re-typing the agreed fees into your invoicing and setting up the billing
How Bookkeeper Dashboard handles it
Proposals are available to every practice on Bookkeeper Dashboard. In practice it works like this:
- Build the proposal. Choose the services and set the prices. Sage, the built-in assistant, drafts the wording from them.
- Edit before it goes out. A draft proposal can be changed before you send it, and if you change the pricing, Sage redrafts the text to match.
- Send it for e-signature. The client signs online, and the signed copy is stored against their record, with no printing and no separate filing.
- Optionally, collect payment and bill automatically. If you have connected your own Stripe account, the client can pay at signing, and fixed recurring fees are then charged on schedule, with the invoices created in your own Xero or QuickBooks.
A note on hourly work: a proposal can state your hourly rate, but hourly time is invoiced separately rather than billed automatically. Automatic billing is for fixed fees.
A simple five-step process to copy
- Write down your two or three standard packages and their prices.
- Draft one engagement letter that covers the list above, and have it reviewed.
- Send every new client a proposal and the letter before any work begins.
- Get the signature first, then ask for the documents you need.
- When an extra request comes in, refer to the letter and quote it separately.
If you are still choosing a system for your practice, our guide to practice management software for bookkeepers covers what to look for. Or you can start a free 7-day trial and try the proposal flow on a real client, with no credit card needed.