Media releasePublished on 24 August 2022

First Xero Small Business Insights report for Canada reveals inflation impact on small businesses

Real sales for Canadian small businesses fell by 1.7% year-over-year amid challenging economic climate

Toronto — August 24, 2022Xero, the global small business platform, today launched its Xero Small Business Insights for Canada and the United States, which provides critical insights into what is happening in this important sector of the economy, and highlights the impact inflation is having on Canadian small businesses.

Each quarter, Xero will provide small business performance data for Canada and the US, covering sales, time to be paid, and late payments across tens of thousands of its small business customers. The launch special report, Small business snapshot: United States and Canada, shares insights into the performance of small businesses in Canada through a shifting economy, from 2017, through the pandemic and recovery, to the current inflationary climate.

Growth has slowed, with inflation skewing sales

The report, produced in partnership with Accenture and based on aggregated and anonymized data from tens and thousands of small business customers across Canada and the US, reveals important insights into how the Canadian economic climate is affecting small businesses:

  • Canadian small business sales growth has slowed through early 2022. In March 2022, small business sales growth was 5.0 percent year-over-year (y/y), a notable slowdown from pre-pandemic average growth of 9.0 percent y/y, and slower than the 13.4 percent y/y rise recorded in February 2022. This measure is a nominal measure of sales - including both price and volume changes.
  • And real sales have fallen: As inflation rose 6.7 percent y/y in March 2022, this means real sales growth, which excludes price effects, actually fell 1.7 percent y/y (down from a 7.7 percent rise in February). That is, the rise in sales growth in March 2022 was due to higher prices, rather than an increase in the amount of goods and services sold.

“With our Xero Small Business Insights, our goal is to not only advocate for small businesses, but also empower them and our policy makers with data that informs the right decisions for our shared futures,” said Chris O’Neill, Chief Growth Officer, Xero. “We’ve seen from other regions how these insights have truly supported small businesses - and even helped to shape concrete action - and we’re thrilled to bring these insights to the Canadian market.

“Small and medium businesses are the heart of Canada’s economy but it’s been an incredibly tough few years. Sales growth collapsed in May 2020 when the pandemic hit, down 23 percent year-over-year, and then took eight months to get back to consistent positive sales growth.

“As borrowing costs rise, expenses increase, and customer dollars decline in purchasing power, it is more important than ever that small businesses understand exactly what is happening to their costs and profit margins at all times to navigate this tricky period.”

Payment times signal trend towards increased stability

The report also revealed that payment times and late payment delays have improved for small businesses in Canada. An improvement in these metrics means small businesses experienced decreased cash flow pressures.

  • Small businesses waited an average of 27.5 days for invoices to be paid in March 2022, which was slightly quicker than the 2021 average of 28.1 days.
  • Payments were an average of 6.6 days late in March 2022 - just below the 2021 average of 6.7 days.

“It’s heartening that Canadian small businesses haven’t suffered major increases in payment times or delays, due in part to the rapid pandemic-driven uptake of online payments as well as substantial government stimulus packages that added much-needed liquidity into the market,” said O’Neill.

“However, small business owners should note that as inflation continues to rise over the remainder of the year they need to stay on top of their accounts to ensure they are maintaining cash flow and profitability.”

Amit Singh, Managing Director, Accenture, said: “Small businesses and medium sized businesses are the heartbeat of the Canadian economy – making up almost 99.8 percent of employing businesses. Understanding and tracking the performance of small businesses, particularly during times of economic uncertainty, is absolutely crucial for effective economic management and public policy. The Xero Small Business Insights program provides timely insights about the health of small businesses. The metrics in this report have proven the resilience of small businesses in times of challenge – lockdowns, social distancing mandates and now unprecedented growth in 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 leaders. Accounting and bookkeeping partners and the Xero app partner community are gathered over two days to hear the latest from industry leaders and gain expert insight into the newest Xero tools and features to help save time, grow their business and have a greater impact on their clients’ success. Xero also produces regular Xero Small Business Insights for Australia, the United Kingdom and New Zealand. Visit for more information.

For access to the full Small business snapshot: United States and Canada report and access quarterly updates, visit


Media Contact

Xero Communications | Kelly Kerr |

Methodology and Background

The Small business snapshot: United States and Canada report is based on aggregated and anonymized data from tens of thousands of small business customers across Canada and the US. This represents actual data and is not a survey. The report, including the insights and analysis contained within it, was prepared by Accenture with the support of Xero, using Xero Small Business Insights data, publicly available data and Accenture estimates for the purpose of informing and developing policies to support small businesses.

For several years, Xero, in partnership with Accenture, has been providing small business performance reports in Australia, New Zealand and the United Kingdom, based on the aggregated and anonymized data of its customers, in Australia, New Zealand and the United Kingdom. Now, it is expanding Xero Small Business Insights to Canada and the United States for the first time.

Xero Small Business Insights will be released quarterly in Canada and the United States to help increase understanding about the performance of the small business economy. The data and a summary report will be available to download for free each quarter at

About Xero

Xero is a global small business platform with 3.3 million subscribers which includes a core accounting solution, payroll, workforce management, expenses and projects. Xero also provides 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 Assessment. Xero has been named as a FIFA Women’s Football partner under FIFA’s new commercial 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 every day, serving clients in more than 120 countries. We embrace the power of change to create value and shared success for our clients, people, shareholders, partners and communities.

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