Media releasePublished on 26 October 2023

Singapore’s small business cash crunch drives owners to forego salary

New report finds 83% of small businesses in Singapore have experienced at least some cash flow issues in the last year

Singapore – 26 Oct 2023 – Singapore small business owners are dipping into their personal savings, increasing their prices, and not paying themselves to mitigate rising costs and make a profit, according to a new report from global small business platform Xero.

The report titled “Money matters: navigating the impact of economic conditions on the cash flow of Singaporean small businesses” surveyed over 1,000 businesses on their perspectives and behaviours on cash flow management.

The report’s findings indicate significant signs of financial stress for Singapore’s small business owners, with almost a third (31%) revealing they’ve not been able to pay themselves and 19% accessing their personal savings to keep their business afloat. The report also revealed that 83% of small businesses on the island have experienced some cash flow issues in the past 12 months, which have affected their ability to grow, hire new staff, and invest in new capabilities.

Late payments can have impacts on the entire supply chain and create a domino effect, making it difficult for businesses in Singapore to pay their own bills on time (27%), which can contribute to cash flow stress. Many have also needed to negotiate payment terms with suppliers (41%) and experienced stalled revenue (30%).

“Cash flow is not only a top priority for many small businesses, in today’s challenging volatile and uncertain economy, it’s also a major challenge. Our research uncovers some of the concerning tactics Singapore’s small business owners are using to keep their businesses afloat, along with the sacrifices they are making to cope and keep employees paid,” said Koren Wines, Managing Director, Xero Asia.

According to the report, 50% of small businesses in Singapore believe that inflationary pressures will continue to have an extreme or high impact on their business. These sentiments come even as Singapore’s inflation rate moderated to 3.4% in August 2023, and small businesses received new government relief measures to ease inflationary and cost-of-living pressures.

In addition to cash flow challenges, many small business owners in Singapore are experiencing an increase in emotional distress, the top three being stress (53%), anxiety (46%), and sleepless nights (44%).

An Air of Optimism

Despite these troubling figures, an air of optimism still exists among Singapore’s small business community. The survey’s insights show that 81% of small businesses feel at least reasonably upbeat and reassured about their financial well-being, with 40% describing themselves as very confident and secure. 61% of small business owners on the island believe they are on track to achieving their financial goals. This positivity originates from the entrepreneurial and innovative spirit of small businesses on the island, which are taking tangible steps to optimize their cash flows by seeking more tools, support, and resources to deal with financial pressures.

“It is promising to see that small businesses in Singapore are taking the year’s economic challenges in stride. While they face a difficult road ahead, business owners can transform the way they model their business and operations impactfully using technology,” said Wines.

A growing number of small businesses in Singapore are employing digital solutions to effectively manage their cash flow. One in three small businesses on the island are using accounting software like Xero to leverage tools such as forecasting and analytics that can provide real-time financial insights to help plan and predict financial performance. Other valuable tools provide monthly reminders or scheduled payments to improve their transaction management. Small businesses are also expanding into more digital payment modes like PayNow, which are supported by government-led initiatives like the Productivity Solutions Grant, StartDigital, and InvoiceNow.

Wines adds that “business transformation should continue to be a multi-pronged approach. Outside expertise will give small business owners the knowledge they need to tighten financial practices, while digital solutions will provide the capabilities small businesses need to manage and sustain cash flows better, giving owners the confidence they need to deal with financial pressures.”

Confidence in Processes

Among the countries surveyed, Australia and New Zealand included, Singapore’s small business owners were most likely to seek support from accountants or bookkeepers before making financial decisions, such as whether or not to increase their prices. Hospitality (90%) and manufacturing (85%) are some sectors that are more actively seeking external expertise to better manage their processes, while retail (57%) and education (56%) industries were less inclined to do so.

"At Xero, we're deeply committed to supporting Singapore’s small business owners as they face financial challenges. Our latest report sheds light on the sacrifices these entrepreneurs make, from dipping into personal savings to holding off on their own incomes, to continue being a critical part of Singapore’s diverse and vibrant economy. It's clear that these entrepreneurs are very resilient, and we're dedicated to providing them with the financial tools and resources they need to thrive," said Wines.

To download a copy of the report, visit Xero’s cash flow hub now:


Media Contact

Peggy Lee | Xero Communications | | +65 8764 7407

About Xero

Xero is a global small business platform with 3.7 million subscribers which includes a core accounting solution, payroll, workforce management, expenses and projects. Xero also has an extensive ecosystem of connected apps and connections to banks and other financial institutions helping small businesses access a range of solutions from within Xero’s open platform to help them run their business and manage their finances. For four consecutive years (2020-2023) Xero was included in the Bloomberg Gender-Equality Index. In 2021 and 2022, Xero was included in the Dow Jones Sustainability Index (DJSI), powered by the S&P Global Corporate Sustainability Assessment. Xero is a FIFA Women’s Football partner.

About the research

This report is based on the collated responses from an online survey conducted by global market research company Insights Exchange with 1,001 small to medium-sized businesses (up to 50 employees) across Singapore, recruited from a mix of three online market panels. Responses were collected from 8 to 26 August 2023.

The Money matters report and survey has also been conducted in other regions, including Australia, New Zealand, Canada and the United States.

For all media enquiries, please contact the Xero media team.

Start using Xero for free

Access Xero features for 30 days, then decide which plan best suits your business.