A new data set providing a unique insight into the operation of Australian business has been launched via Xero Small Business Insights. Xero is an accounting software business founded in New Zealand more than a decade ago but now operating globally and with over half a million subscribers in Australia alone.
Xero is a dual-listed (ASX & NZX) company that allows small business to manage and monitor cash flow and to administer key functions such as payroll. By aggregating anonymized information from a large sample of subscribers, the Xero SBI monthly report is able to track the performance of Australian small business. Traditional measures of small business activity by the Australian Bureau of Statistics, for example, tend to be narrower and less frequently updated.
Xero Small Business Insights disrupts and rethinks the entire business information process. Why conduct a survey when it is possible to report aggregated data on, say, employment drawn from a customer base of hundreds of thousands of subscribers. And that is precisely what Xero Small Business Insights does. And so today Xero can report that net growth in employment for the subscriber base on Xero Payroll was 1.3% between May and June 2017.
This perspective doesn’t apply to the whole of the economy; just to the small business sector. But then the small business sector covers more than two million businesses employing less than 20 workers. Aggregated information relating to the operation of these businesses serves as a lens through which to observe the entire small business ecosystem.
This first edition of Xero SBI is a bit like the unveiling of the Hubble telescope in 1990 which enabled scientists for the first time to see into deep space, because they were freed from the haze of the earth’s atmosphere. And so it is that business is now able to glimpse the small business economy. If there is an inflection point in the Australian economy, and especially if it comes out of the small business sector, it is likely to be picked up through the aggregated cashflows, staffing levels and trading flows that are now being monitored and reported by Xero.
And then there’s the sheer thrill of sighting data never seen before. It really is like looking through a telescope into the rings of Saturn. This first edition of Xero SBI shows that the time taken to pay invoices issued by small business is contracting, which suggests that confidence and liquidity is being injected into the Australian economy.
Is a 1.3 percentage point rise in employment in general between May and June 2017 good or bad or is it merely on trend? Does the time taken to pay invoices collectively rise and fall throughout the year? Indeed how does your small business compare with the trading insights now being provided by Xero Small Business Insights?
Here is a bold new dataset that excites, that informs, and that will assist with business decisions that need to be made. Here is an advance in the way data is collected and disseminated that I think will reshape the way small business and perhaps all business is conducted in Australia.
Congratulations Xero. You have created the business statistician’s version of the ground-breaking Hubble telescope.