Checking a supplier's announced price increase

    Seven steps to test an indexation letter or rate notice against your contract, before the new price quietly appears on your invoices from 1 January.

    6 min read7stepsUpdated 6 November 2026
    1. 1

      Start from the contract, not the letter

      The supplier's letter tells you what the supplier wants. What they are allowed to do sits in the signed contract, the latest amendment to it, and the general terms and conditions that apply. Find all three before you reply. If there is no price indexation clause or other pricing mechanism, the supplier cannot simply raise prices on their own during the term. The letter is then a proposal, and you are free to decline it.

    2. 2

      Write down exactly what the clause says

      Note five things: which index applies, which month or period is the reference point, the date the increase takes effect, how much advance notice the supplier must give, and whether there is a cap or a threshold. Most contracts point to the consumer price index published by the national statistics office, but some refer to a wage index, a fuel index or the supplier's own price list. That last one is not an index at all. It is a blank cheque.

    3. 3

      Do the arithmetic yourself

      Look up the index figures and calculate: new index figure divided by old index figure, minus 1, times 100. If you get 2.8 percent and the supplier announces 5.2, something else is going on. The usual causes: a different reference month from the one in the contract, two years of indexation applied at once because last year was skipped, indexation on a rate that had already been raised outside the clause, or a 4 percent cap that is simply ignored. Loio found that 71 percent of contracts are never checked for compliance after signing (Loio, 2026). Suppliers know this too.

    4. 4

      Check whether you can still give notice or negotiate

      If the increase lands on a renewal date, check the notice period straight away. While the last notice date has not passed, you hold more than an argument about numbers: you can terminate, or use the increase as the opening for a renegotiation on volume, term or service levels. Bear in mind that statutory rights to walk away after a price increase are mostly written for consumers. Between businesses, the contract decides whether you have a way out.

    5. 5

      Reply in writing, before the effective date

      You have three possible answers: agree, agree with a corrected percentage, or ask for the calculation behind the figure. Put your own calculation in the email, with the index figures and their source, and send it both to your contact and to the notices address in the contract. Silence is not automatically consent, but paying the new invoices for months without objection makes a later dispute much harder to win. An objection in November is a conversation. An objection in May is a dispute.

    6. 6

      Record the new rate against the contract

      Log the new rate, the effective date, the index figure used and the email confirming agreement in your contract register. Set a reminder for the next indexation round straight away, a few weeks before the supplier's notice deadline. That way your own calculation is ready before the letter arrives rather than after it.

    7. 7

      Check the first invoice at the new rate

      An agreed rate only counts once it shows up correctly on an invoice. Put the first January invoice next to the agreed rate, for every supplier that announced an increase. CIPS reports that up to 80 percent of invoices deviate from the original contract. Three-way matching catches this as a matter of routine: order, receipt and invoice have to agree before anything is paid. At the next renewal, tighten the clause itself using our price indexation clause template, with a cap and an index that also works downwards.

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