Xero prices are going up on 1 July. Here's what to do about it, depending on how your firm bills.

Xero has announced its 2026 price increases for Australia. If you haven't seen the numbers yet, read that first.

The short version: plans are going up between 3% and 10%, the multi-organisation discount is being removed from 1 July, and existing promo codes will be honoured until they expire.

Now the question that actually matters. What do you do about it?

The answer depends entirely on how your firm currently bills for software. There are roughly three setups, and each one has a different path forward.

If you use Ignition

Many firms bundle software into their service proposal. One number, one acceptance. It feels tidy until a vendor moves its pricing and you have to decide whether to absorb the difference or re-issue the proposal. The cleaner approach is two proposals. One for your services. One for software. When Xero raises prices, the software proposal is the only thing that changes. Your service fees stay exactly where they are. The client isn't confused about which cost moved and why.

If you're updating engagement letters for the new financial year anyway, this is the transition to make. Your clients are already reviewing and accepting new terms. Adding a separate software proposal into that process is a five-minute conversation, not a structural overhaul. The benefit compounds over time. Next time a vendor changes pricing, you don't need to touch the service proposal at all. The client accepts the updated software proposal and that's it. Less effort for you, no confusion about where the increase came from, and no impact on when your service fees get paid.

If you use repeating invoices in Xero or GoCardless

This is where most of the pain lives.Repeating invoices in Xero are fixed amounts. Software costs are variable. Every time Xero adjusts pricing, someone in your team has to pull up every repeating invoice, check the plan, calculate the new amount, and update it manually. For a firm with 200 clients, that's two days of admin. Maybe more.

We've seen firms estimate the labour cost of a Xero price change at between $400 and $1,200. That covers the time spent updating invoices, chasing failed payments, and fixing the ones that got missed. The structural problem is clear. You're using a fixed billing tool to manage a variable cost. It works until it doesn't, and it stops working every time there's a price change.

If you're on GoCardless, the good news is that existing mandates can migrate to a new billing system without your clients needing to do anything. The process typically takes about a week. So the switching cost is lower than most firms assume.

If you bill through WIP

WIP billing means you're absorbing software costs upfront and recovering them later. Sometimes months later. The lag creates a cash flow problem that most firms underestimate. Firms are commonly sitting on tens of thousands in unbilled software costs at any given time. That's three to six months of Xero subscriptions you've paid for but haven't billed yet. Moving software costs to a monthly direct debit solves both problems at once. You recover costs in the same month you incur them, and you remove software from the WIP cycle entirely.

This doesn't mean you have to abandon WIP for your service fees. You can run monthly software billing alongside your existing WIP process. Software gets billed monthly and automatically. Services get billed however you already bill them. The two sit side by side without conflict.