Xero releases 4-point plan to help small business

In response to the startling information, Xero has released a manifesto for change including a four-point plan for recovery to ensure the nation’s resilient small businesses don’t get left behind.

With 894,000 UK small businesses and accounting and bookkeeping practices using its platform, Xero is providing recommendations to government and industry bodies to:

• Do more to help small businesses thrive: A Small Business Minister should attend cabinet and increase representation elsewhere to ensure their voice is heard.
• Tackle late payments once and for all: Hold businesses to account through transparent reporting of what Xero believes is “unapproved debt”.
• Harness the power of hard-working accountants and bookkeepers: Bridge the skills gap and promote their crucial role in supporting small businesses.
• Equip firms with the right digital skills: Write off digital tech investments to help small businesses move online or to remote operations.

Alex von Schirmeister, UK managing director said too often, the needs of small businesses are left behind.

“We are calling on policymakers to not forget about the nation’s incredible small businesses,” Mr von Schirmeister said.

“Small businesses remain a critical way to restore growth yet there are some obvious and easy things we could do to bring about change. It’s disappointing that late payments continue to take a toll on livelihoods and the mental health of so many.

“We can all work together to support faster payments to small businesses by firms of all sizes; have a collective voice for small businesses in government; and encourage more use of accountants and bookkeepers.”

Xero’s latest Small Business Index showed that payments to small businesses were made on average 8.2 days late in September.

Small businesses also had to wait an average of 30.6 days to be paid by their customers — an increase of 0.6 days compared with August. This represents the longest payment times for two years, putting growing pressure on cash flow and their ability to pay staff and rising bills.

Additional analysis showed that the average UK small business currently faces cash flow crunches — where monthly expenses exceed revenues — for more than four months each year, with almost one in four (23 per cent) experiencing a crunch for more than six months each year.