Xero data reports ongoing sales and payment challenges for Canadian small businesses

Toronto — February 6, 2025 —Xero, the global small business platform, today released its quarterly Xero Small Business Insights (XSBI) data for Canada. XSBI provides a snapshot of the health of the small business sector measured across sales performance, late payments and time-to-be-paid.

The latest data shows that while the time it takes to get paid is improving, late payments and sales of goods and services continued to fall over the three months to September 2024. This suggests that Canadian small businesses continue to be resilient, even in the face of challenging conditions.

From July to September 2024, small business sales fell by 2.5% compared to the same quarter in 2023 (ie year-over-year (y/y)). This is despite the Bank of Canada implementing interest rate cuts to try to encourage consumer spending. While time-to-be-paid improved slightly — small businesses were paid 0.7 days sooner compared to the previous quarter — late payments worsened, increasing from 7.6 days in the three months to June to 8.2 days in the three months to September.

“Our latest XSBI data highlights a challenging but important reality: interest rate cuts take time to flow through to the small business sector,” said Louise Southall, Economist at Xero. “We also need to consider that there’s been a lot of change since September, including the US government’s decision to levy tariffs on Canadian goods and the subsequent retaliatory measures. Small businesses and their customers on both sides of the US-Canadian border will pay more for cross-border goods, impacting the often intertwined supply-chains and increasing the cost of business operations.”

XSBI tracks regional data across British Columbia, Alberta and Ontario. In the three months to September 2024, all three provinces experienced a year-over-year decline in sales. Notably, British Columbia recorded the weakest sales performance (-5.0% y/y), while Alberta had the smallest fall (-2.6% y/y).

“Strong macro-trends continue to shape the sales performance data we see each quarter,” said Mike Cascone, Vice President of Government Experience, Americas at Xero. “As small businesses continue to navigate changing conditions, pending relief from rate cuts, it’s important to zero-in on the unchanging factors of business success — like managing cash flow, building strong customer relationships, and maintaining operational efficiency.”

To access the latest data, visit the XSBI website.

ENDS

Media Contact

Xero | Rola Tfaili | capress@xero.com

About Xero

Xero is a global small business platform with 4.2 million subscribers. Xero’s smart tools help small businesses and their advisors to manage core accounting functions like tax and bank reconciliation, and complete other important small business tasks like payroll and payments. Xero’s extensive ecosystem of connected apps and connections to banks and other financial institutions provide a range of solutions from within Xero’s open platform to help small businesses run their business and manage their finances more efficiently.

About Xero Small Business Insights

The aim of Xero Small Business Insights is to create insights to help inform decision makers in support of the small business economy as a whole. The principal source of small business insights in this report is customer data from Xero - a small business platform that supports online accounting and a range of other applications. Xero is a responsible custodian of our customers' sensitive data and does not release any data that could identify individual businesses. The data used is aggregated and anonymized to ensure the privacy of Xero subscribers, and their counterparts.

As part of the program, we publish regular blogs, research notes and deep-dive special reports on specific small business topics. These can all be found at xero.com/xerosbi.

Full details of the methodology can be found here.