A price increase letter has one job: tell a client what changes, by how much, from when, and why — in a way that leaves them no reason to call, except to say thanks for the warning. For clients on recurring billing it has a second job most templates ignore: the price in the letter has to be the price on the next invoice.
Below are four letters you can copy, for the four situations that cover most recurring work, followed by the part that goes wrong after the letters are sent.
What every price increase letter needs
Whatever the tone, the letter is not finished until it answers these six things:
| Element | Why it matters |
|---|---|
| Old and new price, in figures | “A small adjustment” invites a call. “$480 to $505 a month” does not. |
| Effective date | Tie it to a billing date — “from your 1 February invoice” — not a vague month. |
| The reason, in one or two sentences | Costs, inflation, added scope. One reason, stated plainly. |
| What the client gets | Continuity at minimum; any added value if it is real. |
| What they need to do | Usually nothing. Say so. |
| Who to contact | A named person and a direct line, not a generic inbox. |
Leave out apologies, long justifications and lists of your own rising costs. A client reads over-explanation as uncertainty, and uncertainty as room to negotiate.
How much notice to give
Your agreement decides first. Read the price-change clause in your terms or engagement letter before choosing a date; if it sets a notice period, that is the minimum. Where it is silent, these are common practice:
| Billing pattern | Typical notice |
|---|---|
| Monthly subscription or retainer | 30 days, ideally one full billing cycle plus a week |
| Quarterly billing | 60 days, so one invoice at the old price lands after the letter |
| Annual or prepaid contracts | 60–90 days before renewal |
| Fixed-term contracts | At renewal only, unless the contract allows a mid-term change |
For a 1 January or 1 February rise, that means letters go out in October or November. For a 1 April or 1 July financial-year rise in Australia or New Zealand, January to March.
Template 1: inflation / CPI increase
The most common rise and the easiest to defend, because the client sees the same inflation figure everywhere else. If you link the increase to CPI, use the published figure — this guide covers where to find it and how to turn it into a rate.
Subject: Your [service] pricing from [effective date]
Hi [First name],
I’m writing to let you know that from your [effective date] invoice, your [service] fee will move from [old price] to [new price] per [month/quarter], an increase of [x]%.
This follows the [x]% rise in the Consumer Price Index over the past year. We review our prices once a year against CPI rather than in ad-hoc steps, so you can plan around it.
There’s nothing you need to do — your [service] continues exactly as it is. If you’d like to talk it through, reply to this email or call me on [number].
Thank you for working with us.
[Name] [Role], [Business]
Template 2: value-based increase
Use it when the price rise comes with something real — added scope, faster turnaround, a new report. Lead with the value only if the value is genuine; clients spot a dressed-up cost rise immediately.
Subject: What’s changing in your [service] for [year]
Hi [First name],
Over the past year we’ve [specific improvement — e.g. moved your reporting to monthly, added a dedicated contact, cut turnaround to two days]. From [effective date] we’re also [new inclusion].
To keep delivering at this level, your fee will change from [old price] to [new price] per [month] from your [effective date] invoice.
You don’t need to do anything. If you’d like to review what’s included, I’m happy to set up a short call — just reply with a time that suits.
[Name]
Template 3: retainer clients (accountants, bookkeepers, agencies)
Professional-services retainers carry more relationship weight per client, so the letter is personal and offers a conversation up front. It suits firms that send each letter individually rather than in bulk.
Subject: Your [monthly retainer / engagement] for [year]
Hi [First name],
As we head into [year], I wanted to let you know personally that your monthly [bookkeeping / accounting / support] retainer will move from [old price] to [new price], effective from the [date] invoice.
This reflects [one-sentence reason — e.g. increases in software and staff costs over the year]. The scope of your engagement stays the same: [two or three core inclusions].
If your needs have changed and a different arrangement would suit you better, I’d rather hear that now than later — let’s talk. Otherwise there’s nothing you need to do.
Thanks for your continued trust,
[Name] [Firm]
Template 4: short email for small subscription fees
For low-value recurring fees — software, maintenance plans, memberships — a short notice respects the client’s time. Long letters about small amounts read as nervous.
Subject: Price update from [effective date]
Hi [First name],
From [effective date], your [plan] will change from [old price] to [new price] per [month]. Your first invoice at the new price will be dated [date].
Nothing else changes and there’s nothing for you to do. Questions? Just reply.
[Business]
Subject lines that get opened and not escalated
- Your [service] pricing from [date]
- A pricing update for [year]
- Upcoming change to your [plan] fee
- What’s changing in your [service] for [year]
Avoid “Important notice”, “Action required” and “Price increase!” — the first two suggest something is wrong, the third reads as a promotion.
The part that goes wrong after the letters go out
Most price rise mistakes are not in the letter. They are in the gap between the letter and the invoice.
If you bill clients through repeating invoices in Xero, each template holds its own copy of the price. Sending the letter changes nothing; updating the item in Products and services changes nothing either. Every template has to be edited before its next run date, or the first invoice after the letter goes out at the old price — and a client who was told $505 and billed $480 starts asking what else is wrong with your billing.
The other way round is worse: a template updated before the effective date bills the new price early, against a letter that promised otherwise.
A sequence that keeps letter and invoice in step
- Export the list of recurring lines — customer, current unit price, schedule and next run date. Xero has no export for repeating invoices; here are three ways to get one.
- Work out each new price in the same sheet, with your rounding rules applied, so the figure in the letter is the figure you will bill.
- Mail-merge the letters from that sheet. Old and new price come straight from the columns — nobody retypes a figure.
- Update the templates to start on the effective date, not before.
- Check the first invoice cycle after the effective date against the sheet.
In Invoice X steps 1, 2 and 4 are one screen. Load your repeating invoices from Xero, stage the rise — a percentage or a fixed price, with a minimum-increase floor and rounding to 50c, $1, $5 or $10 — and set the start date to the date in your letter. The Export button then downloads every line with customer, current unit, new unit, change % and new annual value: the mail-merge source for your letters, in the same numbers that will be written back to Xero. Once the letters are out, push the change. Each template is rebuilt as create → verify → retire, so nothing is half-updated if a write fails.
Common questions
Should a price increase letter apologise?
No. An apology frames the rise as something you have done to the client. State the change, the reason and the date, thank them, and offer a conversation. That is respectful without being defensive.
Is email enough, or does it need to be a letter?
Email is normal for recurring billing and creates a dated record. Check your terms: some contracts specify written notice to a particular address. For your largest clients, a call before the email lands is worth the ten minutes.
Should every client get the same increase?
Not necessarily. Many businesses apply a standard percentage with a minimum dollar increase, so small legacy fees catch up, and treat their largest accounts individually. Whatever you decide, record it per client — the letter, the spreadsheet and the invoice must agree.
What if a client pushes back?
Decide your position before the letters go out: hold the price, phase it over two cycles, or reduce scope to match the old fee. Changing scope is usually better than discounting, which teaches every client that the letter is an opening offer.
How do I apply the rise to all my Xero repeating invoices at once?
Xero has no bulk edit for repeating invoices, so natively it is one template at a time. This guide walks through the options, from manual editing to a full previewed bulk update. Invoice X is one plan at $29 USD a month for up to five users.