Australian agencies are raising prices, but many are still struggling to keep profits intact. According to Ignition’s new 2025 Agency Pricing & Cash Flow Report, 93 per cent of agencies raised prices this year, yet most are still losing money to late payments, unbilled scope creep and outdated billing practices.
With 2026 around the corner, now is the time for agencies to rethink how they charge, bill and collect if they want to protect margins in the year ahead.
The real cost of weak pricing practices
The report highlights the small but costly cracks in agency operations. Forty three per cent of agencies lose up to $5,000 each month to work that slips out of scope and never gets billed. Another 41 per cent said their cash flow is unpredictable, while 75 per cent admit this unpredictability has directly stalled growth initiatives. The Inside the Numbers section also shows how agencies are approaching price rises. Forty one per cent are lifting fees by 5–10 per cent, 27 per cent by 11–15 per cent, and 14 per cent by 16–20 per cent.
Sarah Lawrance, founder and director of Hot Toast, said agencies must start treating pricing as a deliberate business strategy, not a box to tick.
“Pricing is foundational. It impacts everything: your bottom line, capacity planning, and how you invest in your business. If you’re not reviewing prices annually, you’re leaving money on the table.”
Hourly billing is holding agencies back
Despite the risks, 20 per cent of agencies still rely on hourly billing as their main pricing model. It may feel simple, but it ties income to time instead of value and makes forecasting far less reliable. A growing number of agencies are also moving towards subscription-style packages and tiered models, giving them more predictable income and stronger client loyalty. The survey shows 22 per cent use project-based pricing, 22 per cent use fixed monthly retainers, and 17 per cent have adopted productised or subscription-style packages.
Loz Markham, founder of DEFACTO Co, helps explain the shift, “You’re more than your billable hours. Shape your services into clear packages so clients see the value in what you create, not just the time it takes.”
Scope creep remains the silent killer
Few things drain agency margins like unbilled extras. From “quick tweaks” to additional meetings, scope creep continues to be one of the most damaging yet overlooked threats to profitability. The data shows 74 per cent of agencies are losing between $12,000 and $120,000 annually in unbilled work. Only 7 per cent report capturing all out-of-scope revenue. Without clear scoping processes, agencies are effectively training clients to expect more for less. Putting boundaries in writing, tracking changes as they happen and billing for extras immediately can reverse the trend.
Late payments are crushing cash flow
Even when pricing is solid, late client payments are wreaking havoc. The report reveals that 93 per cent of agencies face late payments, with nearly half saying their revenue feels like a rollercoaster from month to month.
Agencies breaking the cycle are collecting payment details upfront, setting automated billing schedules and sending clear reminders, which removes the awkwardness of chasing overdue invoices.
Markham notes the transformation in her own business, “I used to struggle with late payments and manual proposals, but now my cash flow is steady and my revenue has skyrocketed.”
Looking ahead to 2026
The report’s findings paint a clear picture: the way agencies price, package and collect payments today will determine how sustainable they are in the year ahead. Agencies that adapt are already proving that margins can be protected without sacrificing creativity or client relationships. In practical terms, leaders should set a schedule for annual or semi-annual price reviews, introduce clear tiers with optional add-ons, and pilot subscriptions wherever ongoing work is needed.
Benchmarking against the report’s data will help set targets for win rates, margins and cash collections. Teams can pair governance with tools that automate proposals, price updates and payments so nothing slips through the cracks.
Stop the profit leaks with real agency data
Ignition’s 2025 Agency Pricing & Cash Flow Report provides the data and strategies agencies need to plug profit leaks, strengthen pricing, and get paid faster.
With insights from over 150 Australian agencies, the report gives you the benchmarks and strategies to protect your margins, price with confidence and fix the profit leaks still holding back the 93 per cent of agencies raising prices, so you can build predictable growth in 2026.
