Cash go with the flow crunch: US businesses fight to develop as overdue bills and scope creep chew

The 2025 Agency Pricing & Cash Flow Report, in accordance with a survey of 273 company leaders throughout inventive, virtual, branding, PR, and social media services and products, unearths that 63% of US businesses face “very” or “somewhat” unpredictable money go with the flow. This volatility is some distance from educational: 82% mentioned they’ve been compelled to prolong or cancel plans to rent, put money into tool, or extend operations as a right away outcome.

“In today’s economy, it’s the unpredictability of cash flow that can be most damaging,” mentioned Greg Strickland, CEO of Ignition. “Many agencies get stuck in a frustrating cycle. They want to scale, but inconsistent cash flow holds them back.”

Late bills: nonetheless the norm, no longer the exception

One of the most important culprits? Clients are paying overdue, incessantly by means of weeks or months. According to the record, 97% of businesses revel in overdue bills, with 65% pronouncing that a minimum of 1 / 4 in their invoices are paid overdue. For over part, the cost prolong stretches 15 to 60 days past the due date.

That lag comes at a value. 84% of businesses say they spend 3 to 10+ hours every month simply chasing unpaid invoices – time that might in a different way be spent on consumer paintings or technique.

Scope creep quietly eroding margins

Another main drain is scope creep – the ones further rounds of edits or last-minute adjustments that by no means make it directly to the bill. Ignition discovered that 57% of businesses lose $1,000 to $5,000 a month to unbilled scope creep, whilst 30% say the determine exceeds $5,000. Only 1% say they effectively invoice for all out-of-scope paintings.

This per month income leakage no longer best dents profitability, it compounds the trade’s broader money go with the flow downside. Nearly 80% of businesses admit they infrequently or best every now and then fee for extra paintings, both because of a reluctance to lift uncomfortable conversations with shoppers or a loss of techniques to trace paintings successfully.

The legacy of ‘pay later’ pricing

The analysis additionally highlights a cultural factor: businesses proceed to default to post-delivery billing, at the same time as shoppers prolong bills. Only 16% of businesses require complete cost prematurely, whilst just below part request partial bills. This reliance on ‘pay later’ practices – incessantly noticed as vital to stick aggressive – exacerbates monetary instability.

According to Strickland, it’s time for a mindset shift. “With better data, proven cash flow practices and the support of automation technology, we believe agencies can scale more efficiently and sustainably,” he mentioned.

A shift in pricing fashions?

Some businesses are exploring extra fashionable pricing constructions to resolve those problems. While 28% nonetheless depend on hourly billing, any other 28% are transferring towards productized or subscription-based programs. Only 10% use retainers, with 25% who prefer project-based pricing, highlighting a fragmented, still-evolving pricing panorama.

Meanwhile, adoption of billing tech is emerging. Half of respondents use accounting tool for invoicing and 20% have applied platforms that may gather consumer cost main points prematurely and fee routinely.

The giant image

For an trade that prides itself on velocity, agility and innovation, the money go with the flow truth stays stubbornly out of date. Ignition’s learn about means that if businesses wish to wreck the cycle, they’ll want to get more difficult on billing, extra constant in pricing and smarter with automation. Because whilst the paintings may win awards, it received’t develop the trade if the bill isn’t paid.