A rate that was fair two years ago, before costs rose and the scope of what's included quietly grew, is often underpricing the work today, and nobody notices because the erosion happens gradually, one small unbilled extra at a time, rather than in one obvious moment. By the time it's visible in the numbers, real margin has already been given away for a long stretch.
An annual rate review isn't about raising every rate every year. It's about finding out, on a real cadence, which rates no longer reflect the actual work.
Rates that were fair two years ago are often quietly underpricing the work today
Costs rise, scope creeps, and the work involved in serving a given client often grows without the rate ever being revisited. Without a deliberate review, that drift goes unnoticed until it's a real problem.
Put the review on the calendar on a real cadence, not a someday task
A rate review that depends on someone remembering to do it eventually happens rarely, if ever. Put an actual recurring date on the calendar, annually at minimum, and treat it as a standing operational task.
In Stelaah, billed hours, invoice history, and client profitability stay on the record, giving a rate review a real factual basis instead of a gut-feel guess. See how reports works.
Compare each client's rate to actual delivered margin, not just the sticker number
The quoted rate can look fine while the actual margin on a given client has quietly eroded, extra scope absorbed for free, more hours than originally planned. Compare rate to real delivered margin, not just the number on the contract.
Separate clients who are genuinely overdue for an increase from clients who are fine
Not every client needs a rate change in the same review cycle, some are still priced fairly. Separate the genuinely overdue accounts from the fine ones, so the conversation is targeted rather than a blanket increase across the roster.
Give real advance notice before a rate change actually takes effect
Springing a rate increase on a client with no warning damages trust regardless of how justified the increase actually is. Give real advance notice, explain the reasoning plainly, and let the change take effect on a clear future date.
A simple checklist
If you do nothing else, do these five things:
- Put the review on a real recurring calendar cadence.
- Compare rate to actual delivered margin, not the sticker number.
- Separate genuinely overdue clients from ones still priced fairly.
- Give real advance notice before any change takes effect.
- Explain the reasoning plainly rather than springing the change.
Do that, and rates stay honest with the actual cost of the work, instead of quietly eroding one unbilled extra at a time.
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