xero
Xero, a global small business platform, has released data on small business sales and payment times that shows sales continued to decline in mid-2024. This result comes after initial signs of recovery in the beginning of the year, with February showing sales growth for the second time in a year. Similarly, small businesses also faced declining late payment times in the June quarter, increasing by nearly a day from the 2023 average.
These trends were identified as part of Xero Small Business Insights (XSBI), which uses aggregated and anonymized data from tens of thousands of Xero small business subscribers in North America covering the past seven years (January 2017 through June 2024). XSBI also tracks sales and time to be paid for four of the US Census Bureau's major regions (West, Midwest, Northeast and South) to showcase the differing experiences of small businesses in each region.
Findings at a glance:
Small business sales fell an average of 0.9% year-over-year (y/y) in the three months to June (versus a 1.1% y/y decline in the March quarter)
Small businesses waited an average of 29.6 days to be paid in the June quarter (versus 29.8 days in the March quarter)
Small businesses were paid an average of 9.5 days late in the June quarter (versus 9 days in the March quarter)
While sales continue to fall at the national level, the West was the only region to see an increase in quarterly sales. This result still shows sales are barely growing in the West, but small businesses in this region are doing slightly better than the rest of the country.
The latest figures from the National Federation of Independent Business (NFIB) indicate U.S. small business owners are uncertain about the future, with the NFIB Small Business Uncertainty Index reaching its highest-ever reading in September 2024, and the Small Business Optimism Index on a 33-month stint below its 50-year average.
Available solutions to help mitigate late payments – from adapted invoicing flows, automated reminders to broader payment offerings – should certainly be leveraged by small businesses and accountants alike in the face of soft sales.
Go HERE to access source data cited herein.