Clients accept an annual price increase announced in October far more easily than one sprung on them in January. Decide the number this month, so you have time to give proper notice before the year turns.
Many South African businesses wait until the festive season has faded before springing a revised fee schedule on clients in mid-January, right when "Janu-worry" has everyone watching their cash. Raising prices at the moment clients are most cash-strapped invites pushback and, sometimes, lost business. Announcing your annual price increase in October instead gives clients roughly 90 days' notice to adjust their own budgets, and it forces you to actually decide your pricing strategy rather than just catching up with inflation after the fact.
A price change is not just a commercial decision; it carries legal and tax weight. Under the Consumer Protection Act, businesses must give reasonable notice of material changes to ongoing service agreements, and an October notice for a January start comfortably clears that bar.
It is also worth checking your VAT position. If your annual price increase, combined with normal growth, pushes your rolling 12-month turnover over the R1 million threshold, VAT registration with SARS becomes mandatory (you can check the current thresholds at https://www.sars.gov.za/). Missing that threshold without noticing leads to penalties, so calculate your projected revenue now and register through eFiling if needed, building the 15% VAT output into your new prices rather than having it eat into margin later. A meaningful increase in profit also means your provisional tax (IRP6) estimates need updating, so you are not caught with an underestimation penalty.
A price change is only as clean as the systems used to roll it out. Update your item master data and service catalogue in your accounting software, whether Xero or Sage, during the fourth quarter. Rather than drafting individual emails to clients, use your CRM to automate a short notice sequence: a clear, professional notice in October, followed by a brief automated reminder in early December. This takes the emotional weight off your accounts staff and keeps the message consistent across every client.
This is the real point of an annual price increase. Most businesses set prices by looking backward, adding a nominal percentage onto last year's number based on inflation. That approach keeps you treading water; it does not fund growth.
Think instead about where the business needs to be in three years. If you want R3 million in retained earnings by 2027 to fund expansion into new provinces or to hire a general manager, your pricing today has to support that path mathematically. Factor rising costs, fuel volatility and backup power into your true overheads, then work out the minimum margin that protects those plans. Framed this way, your October notice stops being an apology about rising costs and becomes a straightforward statement of the value you continue to deliver.
Lenders and investors pay close attention to pricing power: the ability to raise prices consistently without losing most of your client base. A documented history of a well-communicated annual price increase, rather than erratic catch-up hikes, signals a mature, lower-risk business, and that shapes how attractive you look when you eventually look for growth funding.
Working out the right annual price increase means balancing CPA notice requirements, SARS thresholds and a genuine three-year financial model, which is a lot to get right alone. If you want a second opinion on your 2027 number before you send the October notice, our team can help you build it properly: https://thecomplianceclinic.co.za/services/
Need expert tax and accounting support? The Compliance Clinic helps South African businesses stay compliant, reduce tax liabilities, and grow with confidence. Contact us today: https://thecomplianceclinic.co.za/contact-us/ | View our services: https://thecomplianceclinic.co.za/services/
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