Zero Small Business Insights Finds US Small Business Epidemic “Recovery” Largely Driven by Inflation

Real sales growth for U.S. small businesses slowed to just 2.8% year-over-year after two years Pandemic-induced recession

Denver, August 24, 2022 /PRNewswire/ — Xero, the global small business platform, today announced the launch of its Xero Small Business Insights (XSBI) program, which includes quarterly updates on the small business economy. United States of America and Canada, based on aggregated and anonymized data from thousands of Xero customers. It also launched a special XSBI report: Small business picture: United States of America and Canada which provides insight into business performance and the impact of inflation on US small businesses.

(PRNewsPhoto/Zero)

The report found that small business growth appears to be nearly double the pre-pandemic average, largely due to higher prices rather than an increase in the volume of sales of goods and services. In short, it was caused by inflation and small businesses raising their prices to compensate for market conditions.

Inflation has reduced the numbers
The report, produced in partnership with Accenture, tracks the performance of small businesses since 2017, revealing:

  • Increase in sales March 2022 was 11.3% year-on-year (y/y). This is not more than double the pre-pandemic average growth of 6.7% (y/y), but slower than the 12.6% (y/y) growth recorded in February 2022.

  • Inflation rose to 8.5% (y/y). March 2022 That means real sales growth, which excludes price effects, was much slower at 2.8% (y/y) (and down from 4.7% (y/y). February 2022).

“In March 2022The US was experiencing higher inflation than any other major economy1“, said Chris O’Neill, Chief Growth Officer, Xero. “As borrowing costs rise, expenses increase, and the purchasing power of the customer dollar declines, it’s more important than ever for small businesses to take control of their finances. Always understanding what’s happening to their costs and profit margins will help them navigate this difficult period well. .”

A more positive sign of payment time stability
Fortunately, the report’s insights included some good news regarding payment times for small businesses and slow payment delays for small businesses in America. Delays in payment usually have an adverse effect on cash flow and liquidity, often causing small businesses to seek expansion and increase their borrowing; As such, payback time generally reflects how the business cash flow is performing:

  • Small businesses waited an average of 23.5 days for invoices to be paid March 2022June 2021 was faster than the average of 25.0 days.

  • Payments were 5.6 days late on average March 2022 An average of 7.0 days later in 2021.

“It’s encouraging to see American small businesses making timely payments; naturally, this supports cash flow, which is the lifeblood of any business. This may be, at least in part, due to the increased use of electronic invoicing processes and online payments. embrace digital solutions,” said O’Neill. “However, small business owners should note that as inflation rises through the rest of the year, they need to stay on top of their accounts and work hand-in-hand with a trusted advisor to ensure they are maintaining cash flow and profitability.”

Amit SinghManaging Director, Accenture, said: “Small businesses are the heartbeat of the US economy – making up more than 99% of all businesses. Understanding and tracking the performance of small businesses, especially during times of economic uncertainty, is critical to effective economic management and public policy. Xero Small The Business Insights program provides timely insights into the health of small businesses. The metrics in this report prove the resilience of small businesses during challenging times – lockdowns, social distancing mandates and now unprecedented increases in inflation.”

Launch of Xero Small Business Insights for the US and Canada The announcement was made at Xerocon New Orleans, one of the world’s premier events for cloud accounting leaders. Accounting and bookkeeping partners and the Xero app partner community gathered over two days to hear the latest from industry leaders and gain expert insight into new Xero tools and features to help them save time, grow their businesses and make a greater impact on their customers. Success. Xero also produces regular Xero Small Business Insights AustraliaThe United Kingdom and New Zealand. visit xero.com/xerosbi For more information.

For full access Small business picture: United States of America and Canada Report and access quarterly updates, visit xero.com/xerosbi.

Methodology and background
The Small business picture: United States of America and Canada The report is based on aggregated and anonymized data from thousands of small business customers across the United States. Canada. That is, this is real data, not a survey. The report, including the insights and analysis it contains, was prepared by Accenture in collaboration with Xero using Xero Small Business Insights data, publicly available data and Accenture estimates to inform and develop policies to support small businesses.

In partnership with Accenture, Xero has been providing small business performance reports based on aggregated and anonymized data from its customers. Australia, New Zealand and United Kingdom For many years. Now, with this report, it’s expanding Xero Small Business Insights United States of America and Canada.

Each quarter, Xero will provide small business performance data United States of America and Canada, cover sales, time to pay, and late payments. Each quarter the data and summary report will be available for free download www.xero.com/xerosbi.

about Xero
Xero is a global small business platform with 3.3 million customers that includes core accounting solutions, payroll, workforce management, expenses and projects. Xero also offers access to financial services, and an ecosystem of 1,000 connected apps and connections to more than 300 banks and other financial institutions. Through Xero’s open platform, small businesses can connect to a range of solutions that help them run their business and manage their finances. For three consecutive years (2020-2022), Zero was included in the Bloomberg Gender Equality Index. In 2021, Xero was included in the Dow Jones Sustainability Index (DJSI), powered by the S&P Global Corporate Sustainability Assessment. Named after Xero FIFA Women’s Football Partner Under FIFA’s new professional structure.

About Accenture
Accenture is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized skills across more than 40 industries, we offer strategy and consulting, technology and operations services and Accenture Song – all powered by the world’s largest network of advanced technology and intelligent operations centers. Our 710,000 people deliver on the promise of technology and human ingenuity, serving customers in more than 120 countries every day. We embrace the power of change to create value and shared success for our customers, people, shareholders, partners and communities.

1 Major economies refer to the G7 economies, where CPI data for March can be found https://data.oecd.org/

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