According to the latest Insights report from accounting software provider Xero, late payments “crimped working capital” ahead of the financial year-end – that’s up from 48.9% a year earlier.
The inaugural Xero Small Business Insights, developed with support from global advisory firm KPMG Enterprise, also reveals that as large companies pledge to bring down payment times, small businesses are slowly, but surely, being paid sooner.
And, according to the report, invoices with 30-day payment terms were settled in an average of 36 days in June, down from almost 40 days a year earlier.
Also revealed is that international trade for Xero small businesses fell slightly in June, with the total value of imports and exports sliding 2.6% month-on-month following a spike of 24.3% in May.
And, according to Xero, construction and professional services are leading the charge in adoption of its cloud accounting software to increase efficiency. Of the top five industries adopting Xero in the year through March 2017, construction made up the largest share at 32.7%.
“Xero has helped more than a million subscribers around the globe understand their financial operations better. Now, learning from a large sample of Australia’s 2.1 million small businesses, we can provide insights into their health for the benefit of those that interact with small businesses most,” says Xero Australia managing director Trent Innes.
“Policy and regulation is most effective when based on timely, accurate data. Xero Small Business Insights provides exactly that, based on how small businesses are performing every month, instead of every quarter or year.”
KPMG special adviser and demographer Bernard Salt said: “Xero Small Business Insights is a great leap forward. For the first time, it provides real insight into how the Australian small business economy is tracking.
“Traditionally, it’s been difficult to get aggregated data on small business because of the lack of centralisation. Now, thanks to Xero providing access to their deep analytical insights, enterprise and government will have greater access to information when shaping their investment, policy and decisions.