Justifying A Price Increase
Sep 11, 2025
Raising your prices doesn’t have to be a shot in the dark or a gut decision that keeps you up at night. In fact, when your bookkeeping is accurate and up to date, your reports become a guide and keep you from raising your prices in vain.
Most business owners look at pricing through emotion, comparison, or fear. But when you have clean books, you can look at pricing through what it actually takes you to run your business and build up cash reserves. Let’s break down how your Profit & Loss report, Balance Sheet, and detailed tracking can help you confidently increase your rates and back it with data.
Start with Your Profit & Loss Report
Your P&L (Profit & Loss Statement) tells the story of your revenue, expenses, and net income over time. It’s one of the most powerful tools you have for pricing decisions.
Look at your service or product categories. Which ones bring in the most revenue? Which ones cost the most to deliver? If a service has grown more expensive to provide due to inflation, payroll increases, or software tools, you can clearly see that margin shrink.
That’s your first indicator it may be time to raise prices, not because you “feel like it,” but because you are starting to have to take out loans to cover payroll.
Identify Hidden Costs in Your Operations
Your bookkeeping can also show you the real cost of delivering each offer.
By coding expenses correctly and breaking down categories, you’ll start to see:
- Software tools tied to a specific service
- Labor costs associated with fulfillment
- Time costs (when paired with time-tracking software)
- Marketing or acquisition costs for each product or client
This gives you the insight to ask: “Am I pricing this offer for scalability, by gut feelings, or am I charging just enough to keep the lights on?”
Watch for Consistency and Trends
Data over time reveals trends. Did you know you can pull up your Profit & Loss Reports by month? And it will show you the percentage of each expense line compared to your income? You can also see if your costs have been rising slowly over the past year or if certain offers are becoming more popular or more expensive to deliver?
When you present a price increase to clients, showing them that your expenses have shifted over time, not overnight, makes the conversation feel fair, not abrupt. Other business owners are feeling the same crunch and are pulling the same reports. Bonus: this also helps you build a case for quarterly or annual price reviews, to make sure you are charging the right amount.
Use Reports to Build Your Confidence
One of the biggest blocks to raising prices is doubt. You think it’s time, but you’re afraid clients will push back.
Your reports can silence that fear. When you see that a service you love delivering is actually your least profitable, you’re able to step into a new pricing tier with clarity and confidence. No more guilt for raising your prices because you now know that you are losing money if you do not raise them!
Bookkeeping Isn’t Just for the IRS
At My CFO, we believe bookkeeping isn’t just a compliance task. It’s a strategic tool to help you run a smarter, more profitable business. There are over 10 different ways to pull up your Profit & Loss and compare data, showing you the story of your business in a different lens.
With clean, up-to-date books, you’re not justifying a price increase out of desperation, you’re aligning your pricing with the real cost of doing business and the value you bring.
💼 Ready to make pricing decisions based on real numbers?
If you're tired of guessing and ready to use your bookkeeping to drive a confident pricing strategy, we’d love to help.
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