Media releasePublished on 12 July 2023

Nearly half of Kiwi small business owners aren’t paying themselves

Tight cash flow negatively impacting the wellbeing of Kiwi small business owners

Wellington — 12 July, 2023 —Xero, the global small business platform, today released new research revealing New Zealand small business owners are forgoing their pay checks, increasing prices, and cutting costs to combat cash flow struggles.

The report titled ‘Money Matters: navigating the impact of economic conditions on the cash flow of New Zealand small and medium-sized businesses’ surveyed businesses on their perspectives and behaviours on cash flow management.

It found 46% of business owners and 60% of sole traders aren’t paying themselves in order to keep their business running.

Additionally, more than half of Kiwi small businesses (52%) have increased prices to cover the cash flow challenges, while a similar proportion (48%) have sought to review and remove costs.

Xero New Zealand Country Manager, Bridget Snelling, says these insights indicate the significant financial stress many small business owners are facing, which is having a negative impact on their emotional and physical health.

“Cash flow is one of the biggest challenges small businesses are facing. When you add in inflation, climbing interest rates and reduced spend from consumers, small business owners are walking a tightrope every day,” says Snelling.

“When small business owners experience cash flow issues one of the first things to go is their own pay, followed by an inability to pay suppliers which has a ripple effect throughout the economy.”

“It’s a systemic and volatile cycle, which sees business owners dipping into their own personal savings, working unattainable hours, and ultimately sacrificing their emotional and physical wellbeing to stay afloat.”

When asked about the emotional and physical impacts of cash flow management, business owners reported feeling stress (80%), anxiety (70%), trouble sleeping (60%) and losing time with friends/family (47%) over the past 12 months.

The report also found 94% of small business owners not achieving their business goals, and 90% of those who are less confident that they will meet their financial obligations are suffering from stress.

“These findings reflect how closely business goals and financial health are connected to small business owners' personal stress and anxiety,” says Snelling.

Small businesses also called out inflation and its impact on cash flow as a major hurdle, with 48% saying it had a high impact on their cash flow management over the past six months.

Late payments costing small businesses

Late paid invoices are one of the biggest contributors to small business cash flow troubles. Last year, Xero research revealed late invoice payments were costing Kiwi small businesses $456 million annually.

“Getting paid on time is crucial for small business operations. Unlike large businesses, SMEs don’t typically have the working capital available to manage the sometimes ridiculous time between doing the mahi and getting paid for it,” says Snelling.

“Ultimately, we need bigger businesses to pay their invoices on time. Xero challenges all businesses to commit to paying invoices within 10 working days to help strengthen the New Zealand economy while supporting suppliers and customers in the small business community.”

Digitalisation a key step to improving cash flow management

While some small business owners are using management tactics effectively such as setting up direct debits (46%) and using accounting software to track payments (45%), there is still plenty of opportunity to tap into digital tools to help manage cash flow.

“Utilizing digital tools for planning and forecasting helps business owners anticipate periods when cash flow often dips into the red, and adjust how they operate to improve their monthly cash flow position accordingly,” says Snelling.

“The right digital tools can also directly help getting paid faster. This starts with technology that allows you to invoice as soon as a job has been completed, organize automatic follow ups when payments are missed, and also includes features like ‘pay now’ on all invoices to provide organizations with more ways to pay instantly.”

“Small businesses should also be registering their interest for eInvoicing, a technology that will help improve payment times by greatly increasing accuracy and security while reducing human errors.”

To download a copy of the report, visit Xero’s Cash Flow hub.


Media Contact

Natalie Weber-Benning | Xero Communications | +64 21 02619604 |

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.

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

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