Real sales growth for US small businesses slowed to just 2.8% year over year two years later recession caused by the pandemic
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 for United States AND Canada, based on aggregated and anonymized data from tens of thousands of Xero customers. He also launched a separate XSBI report: Small business photo: United States AND Canada which provides insight into business performance and the impact inflation has on American small businesses.
The report found that while small business growth appeared to be almost double the pre-pandemic average, this was largely due to higher prices rather than an increase in the amount of goods and services sold. In short, it’s likely that due to inflation and price increases small businesses will settle for market conditions.
Inflation is skewing the numbers
The report, produced in partnership with Accenture, tracks the performance of small businesses since 2017, reveals:
Increase in sales March 2022 was 11.3% year-on-year (y/y). This is not 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 increased by 8.5% (y/y). March 2022 meaning that real sales growth, which excludes price effects, was a much slower 2.8% (y/y) (and down from a 4.7% (y/y) rise in February 2022).
“In March 2022The US was experiencing higher inflation than any other major economy1“, he said Chris O’Neill, Head of Growth, Xero. “As borrowing costs rise, expenses rise and customer dollars decline in purchasing power, it’s more important than ever for small businesses to take control of their finances. Understanding exactly what’s happening to their costs and margins profit at any time will help them. better navigate this tricky period.”
Payment times are a more positive sign of stability
Fortunately, the report’s insights contained some better news for small businesses in terms of payment timing and payment delays for small businesses in the US. Late payments generally have a negative effect on cash flow and liquidity, often causing smaller businesses to seek expansion and increase their borrowing; as such, payment timing generally reflects how the business’s cash flow works:
Small businesses have been waiting an average of 23.5 days for invoice payment March 2022which was faster than the 2021 average of 25.0 days.
Payments were on average 5.6 days late March 2022 after an average of 7.0 days in 2021.
“It’s encouraging to see timely payments for America’s small businesses; of course, it helps support cash flow, which is the lifeblood of any business. This may be, at least in part, due to the increased use of electronic invoicing and online payment processes as much as possible. small businesses embrace digital solutions,” O’Neill said. “However, small business owners should keep in mind that as inflation continues to rise through the remainder of the year, they need to stay on top of their accounts and work side-by-side 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 – they make up more than 99% of all businesses. Understanding and tracking the performance of small businesses, especially during times of economic uncertainty, is absolutely essential for effectiveness Economic management and public policy The Xero Small Business Insights program provides timely insights into the health of small businesses The metrics in this report have proven the resilience of small businesses in challenging times – lockdowns, social distancing mandates and now unprecedented growth of inflation.”
The launch of Xero Small Business Insights for the US and Canada was announced at Xerocon New Orleans, one of the world’s premier events for cloud accounting executives. Accounting and bookkeeping partners and the Xero app partner community have gathered over two days to hear the latest from industry leaders and gain expert insight into the latest Xero tools and features to help save time, grow their business and have a greater impact on their customers. success. Xero also produces regular Xero Small Business Insights for Australia, United Kingdom AND New Zeland. Visit xero.com/xerosbi for more information.
For access to the full Small business photo: United States AND Canada report and access quarterly updates, visit xero.com/xerosbi.
Methodology and Background
of Small business photo: United States AND Canada report is based on aggregated and anonymized data from tens of thousands of small business customers across the US and Canada. That is, it is actual data not a survey. The report, including the insights and analysis contained therein, was prepared by Accenture with support from Xero, using Xero Small Business Insights data, publicly available data and Accenture assessments to inform and develop policy to support small businesses.
Xero, in partnership with Accenture, has provided small business performance reports, based on its aggregated and anonymized customer data, in Australia, New Zeland AND United Kingdom for several years. Now, with this report, it’s expanding Xero Small Business Insights to United States AND Canada.
Each quarter, Xero will provide data on small business performance United States AND Canada, covering sales, time to pay and late payments. The data and a summary report will be available for free download every quarter at www.xero.com/xerosbi.
Zero is a global small business platform with 3.3 million subscribers that includes a core accounting, payroll, workforce, expense and project management solution. Xero also offers access to financial services and an ecosystem of more than 1,000 connected apps and more than 300 connections to 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) Xero 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 Rating. Xero is named as one FIFA’s partner in women’s football under FIFA’s new commercial structure.
accentuation is a global professional services company with leading capabilities in digital, cloud and security. Combining unmatched experience and specialized capabilities in more than 40 industries, we offer Strategy & Consulting, Technology & Operations, and Accenture Song services — all powered by the world’s largest network of advanced technology and operations centers intelligent. Our 710,000 people deliver on the promise of technology and human ingenuity every day, serving customers in more than 120 countries. We embrace the power of change to create value and shared success for our customers, people, shareholders, partners and communities.
1 The main economy refers to the G7 economies, CPI data for March can be found at https://data.oecd.org/
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