A recent study by Ignition found that 82% of advertising and marketing agencies are delaying or cancelling hiring and investments as 63% suffer from unpredictable cash flow.
Ignition 2025 Agency Pricing and Cash Flow Report, a survey of 273 managers and executives of agencies focused on branding, creative, digital, marketing, PR, social media, or website development and hosting, additionally found that 57% of agencies lose from $1,000 to $5,000 every month on projects and tasks that are unbilled.
Furthermore, 30% say scope creep costs them more than $5,000 a month. More than three-quarters (78%) of agencies say they rarely or only sometimes charge for out-of-scope work, leaving significant money on the table.
Strategies to Confront Cash Flow Issues
Greg Strickland, CEO of Ignition, noted the goal of the study was to help agencies identify where revenue is slipping through the cracks and provide actionable strategies to escape the cycle of unpredictable cash flow.
“With better data, proven cash flow practices, and the support of automation technology, we believe agencies can scale more efficiently and sustainably,” said Strickland in a statement.
Epidemic of Late Payments
The vast majority of agencies (71%) say that at least one in every four invoices is paid late, making late payments a huge contributor to unpredictable cash flow. And 56% said it typically takes anywhere from two weeks to two months after the due date to get paid. Late payments take a big toll on resources—84% of agencies said they are spending up to 10+ hours per month chasing late payments.
While only 16% of agencies require full payment upfront agencies due to fear of losing clients and past tradition, there has been an uptick in changing practices as 49% are requesting partial payment in advance. Hourly billing remains a common practice with 28% utilizing this method.
Besides partial upfront payments, growing trend of agencies include adopting productized or subscription-based service packages or tiered bundles (28%). report retainer-based pricing (10%) and project-based pricing (25%).
Along Comes Automation
Along with the move to new pricing models, billing and collection is moving toward automation as 49%)use accounting software for billing, and 20% have shifted to billing platforms that collect payment details in advance and charge automatically.
Jordan Snider, co-founder of digital agency Token Creative Services and an Ignition customer, noted they were one of many agencies who struggled with late payments. But embracing automation hep turn that tide.
“We were doing great work, but we weren’t getting paid on time and spending hours chasing payments,” said Snider. “My advice to agencies: Stop wasting time on manual admin work. If you want to scale your business, get a solution that automates proposals, invoices, and payments. Now we get paid on time, every time, with zero overdue invoices.”
Breaking the Cycle
Ignition’s Strickland points out that in today’s economy, it’s the unpredictability of cash flow that can be most damaging.
“Many agencies get stuck in a frustrating cycle. They want to scale, but inconsistent cash flow holds them back,” he said. “When critical decisions like hiring or investing in new software are delayed due to volatility, growth slows, and opportunities to attract larger clients slip away.
More strategies and the full results of the Ignition study can be found in the “The 2025 Agency Pricing & Cash Flow Report” which also includes data on how many agencies are raising their fees, by how much, and why — along with actionable guidance to help agencies price confidently, charge their worth, and get off the cash flow roller coaster.
