Media releasePublished on 24 August 2022

Xero Small Business Insights finds US small business pandemic “recovery” largely driven by inflation

Real sales growth for US small businesses slowed to just 2.8% year-over-year two years after pandemic-induced recession

Denver — August 24, 2022Xero, the global small business platform, today announced the launch of its Xero Small Business Insights (XSBI) program which includes quarterly updates on the small business economy for the United States and Canada, based on aggregated and anonymized data from tens of thousands of Xero customers. It also launched a special XSBI report: Small business snapshot: United States and Canada which provides insights on business performance and the impact inflation is having on US small businesses.

The report found that, while small business growth seemed to be nearly double the pre-pandemic average, this was largely due to higher prices rather than an increase in the amount of goods and services sold. In short, it was likely due to inflation and small businesses increasing their prices to solve for market conditions.

Inflation is skewing the numbers

The report, produced in partnership with Accenture, tracks the performance of small businesses all the way back through 2017, reveals:

  • Sales growth in March 2022 was 11.3% year-over-year (y/y). This is not quite double the pre-pandemic average growth of 6.7% (y/y), but slower than the 12.6% (y/y) rise recorded in February 2022.
  • Inflation rose 8.5% (y/y) in March 2022 which means real sales growth, which excludes price effects, was a much slower 2.8% (y/y) (and down from a 4.7% (y/y) rise in February 2022). That is, removing price impacts shows that around three-quarters of the sales growth in March 2022 was due to higher prices rather than an increase in the amount of goods and services sold.

“In March 2022, the US was experiencing higher inflation than any other major economy*,” said Chris O’Neill, Chief Growth Officer, Xero. “As borrowing costs rise, expenses increase, and customer dollars decline in purchasing power, it is more important than ever that small businesses get in control of their finances. Understanding exactly what is happening to their costs and profit margins at all times will help them better navigate this tricky period.”

Payment times a more positive sign of stability

Fortunately, the report’s insights did contain some better news for small businesses in terms of payment times and late payment delays for small businesses in the US. Delays in payments generally have an adverse effect on cash flow and liquidity, often causing smaller businesses to seek extensions and increase their borrowing; as such, payment times generally reflect how business cash flow is functioning:

  • Small businesses waited an average of 23.5 days for invoices to be paid in March 2022, which was quicker than the 2021 average of 25.0 days.
  • Payments were an average of 5.6 days late in March 2022 after averaging 7.0 days in 2021.

“It’s encouraging to see timely payments to US small businesses; naturally, this helps support cash flow, which is the lifeblood of any business. This could be, at least in part, due to increased use of electronic invoicing processes and online payments as more small businesses embrace digital solutions,” 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 and work hand-in-hand with a trusted advisor to ensure they are maintaining cash flow and profitability.”

Amit Singh, Managing Director, Accenture, said: “Small businesses are the heartbeat of the US economy – making up more than 99% of all 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 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

*Major economy refers to G7 economies, CPI data for March can be found at


Media Contact

Xero US Communications | Lauren Kido |

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 the US and Canada. That is, it is actual data 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.

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

Each quarter, Xero will provide small business performance data for the United States and Canada, covering sales, time to be paid, and late payments. 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.

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

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