A contract renewal is the point at which a business can reconsider the price, scope and delivery terms for the next period. To use that opportunity well, finance and account management need to work together before any contractual notice deadline. Start with the contracts where costs have moved most, the exposure is largest or the next decision date is closest.
This is particularly relevant where work includes significant energy, freight, materials or labour costs. A contract that was worthwhile when agreed may now produce a different return. Management needs to understand that change while there is still time to discuss the options with the customer.
The ONS business survey published on 8 October 2026 reports widespread concern about energy prices and supply chains. Those responses provide context. They do not establish the cost increase experienced by an individual supplier or justify a particular price rise. The decision should be grounded in your own costs, service commitments and contract terms.
Start with the date that controls the decision
The renewal date and the deadline for giving notice may be different. A price-review clause may prescribe when a request must be made, what evidence is required and how the adjustment is calculated. Other agreements may require negotiation rather than permit a unilateral change.
Ask the person responsible for each significant contract to identify those provisions. Record the next renewal, the relevant notice date and who will contact the customer. Obtain legal advice where the wording or the right to change terms is unclear. A commercial plan should not rely on a right the agreement does not provide.
Work backwards from that deadline. Allow time to establish the cost position, agree the commercial proposal and discuss it with the customer. If the decision is left until the renewal meeting, the available choices may already be narrower than management expects.
Rebuild the economics of the next period
Begin with the service the business has actually agreed to provide. Compare the expected revenue with the resources required to deliver it during the renewal period. Use current supplier quotations, agreed employment costs and realistic delivery assumptions where available.
Distinguish confirmed changes from estimates. A supplier quotation is different from a general concern that prices may rise. Where a cost remains uncertain, explain the assumption and show how the decision changes at a reasonable alternative level. Management should be able to see which conclusion is supported and which depends on something that has not yet happened.
Look for costs that have become routine but were absent from the original estimate. These might include additional journeys, repeated changes to the specification, extra customer support or senior staff time spent resolving delivery problems. Check whether the business is supplying work outside the agreed scope and whether the contract permits recovery of that cost.
Use contribution consistently. For this purpose, contribution means revenue less the costs attributed to delivering the contract under a stated method. It does not automatically equal the profit available to the business after all shared overheads. Keep the treatment of staff time and shared costs clear so that two contracts are compared on the same basis.
Translate a margin problem into a price decision
Consider a simplified illustration. A contract produces £100,000 of annual revenue and has £75,000 of attributable delivery costs. Its contribution is £25,000, or 25% of revenue. If those costs rise to £80,000 and the price stays the same, contribution falls to £20,000, or 20%.
Increasing the price to £105,000 restores the £25,000 contribution in pounds. It does not restore the original 25% contribution margin. A price of approximately £106,667 would do that, assuming costs remain £80,000. The distinction matters when management says it wants to “maintain the margin”. Be clear whether the objective is a cash amount or a percentage.
This illustration excludes VAT, financing costs, tax and shared overheads. It also assumes unchanged volumes and service scope. It demonstrates the calculation; it does not establish a commercially achievable price or a contractual right to impose one. Customer demand and competing offers still matter.
Consider the choices available to both sides
A price increase is one option. Others could include fewer urgent deliveries, a revised specification, different service hours or a commitment that improves scheduling. A longer term might justify investment, but it may also extend exposure to uncertain costs. Assess that trade-off before agreeing a concession.
Prepare a proposal that explains the service the customer will receive and the basis of any change. Avoid using broad inflation headlines where they do not reflect the contract’s cost structure. A customer is more likely to be able to evaluate a specific change in its requirements or delivery arrangements than a general claim that everything costs more.
Be equally clear internally about the minimum acceptable outcome. A lower contribution may be sensible where there is spare capacity, a reliable customer relationship or a documented commercial reason. It needs to be weighed against the work the business could otherwise deliver and any additional cash commitment. Strategic value should be explained rather than used as a label that ends the discussion.
Agree what happens if terms remain unchanged
Before the conversation, assess the position if the customer declines. Can the business continue on the existing terms? Could it agree a shorter review period? Would a change in scope solve the problem? Are there contractual notice obligations if the business decides not to renew?
Include the cost and timing of each option. Replacing revenue can take longer than expected, and employees, stock or other commitments may remain after a contract ends. Conversely, continuing work at an inadequate return can absorb capacity that is needed elsewhere. The decision should consider both the next period and the transition beyond it.
Finance can prepare the analysis and challenge the assumptions. Account management should bring the customer context and lead the commercial conversation within agreed authority. Directors retain responsibility for the decision. A clear allocation of those roles helps prevent a pricing review becoming an exchange of spreadsheets with no agreed action.
Make the review manageable
Start with a short list of material contracts rather than attempting a complete costing exercise at once. For each, record the decision date, current price, expected delivery cost, contribution, options and responsible person. Add the customer’s response and the next action as discussions progress.
After any change takes effect, compare actual delivery with the assumptions used. Check that the revised price has reached billing, the promised scope is understood by the team and any efficiency improvement has occurred. Otherwise, an agreed increase can be lost through inconsistent implementation.
At the next finance meeting, choose the contracts with the earliest notice deadlines and the greatest exposure. Give the team time to develop a credible proposal while the business still has a choice.
Source and context
ONS business insights published 8 October 2026.
Published 8 October 2026, with survey fieldwork from 21 September to 4 October. The survey describes business concerns, not the cost increase for an individual contract. The review process and numerical illustration above are Accendo guidance, not ONS findings.