Xero passed their one-year mark at Xero Small Business Insights (XSBI), and it’s been a journey with some unexpected turns. As we close out 2018, we’d like to take a look back at the terrain they have covered.
XSBI was conceived in late 2017, the project was driven by the vision of Xero Australia Managing Director. They believed with the right data, policymakers and large enterprises could help end practices such as late payments, which were crippling small businesses. XSBI launched with monthly data on cash flow, late payments, trading overseas and hiring people, drawn from hundreds of thousands of anonymised, aggregated businesses from Xero.
We were gratified when in early 2018, Xero data found its way into media stories and even government hearings. The data explained just what 2.23 million businesses were experiencing, in real time. It is increasingly recognised that XSBI is the torch that illuminates a corner of the economy that had long been hidden.
Late payments is just one area where XSBI sharpened the debate. In collaboration with outside economists, XSBI has gone on to produce special reports on tax cuts and studies on wage growth. These are in addition to monthly updates on small business conditions. Here are some milestones for Xero Small Business Insights in 2018:
What’s the impact of company tax cuts on small businesses – do they hire more workers, increase wages and boost investment? Economists and policymakers have struggled to answer these questions, in part because of a lack of quality data. Using anonymised Xero data, this report directly observed how business owners responded to tax cuts. The report offered an unbiased look at the data, and different news outlets seized on select parts of the report for their headlines.
How does wage growth at small businesses in regional and urban areas compare? Xero crunched the numbers, and found wages at businesses in urban areas were growing 4.2 percent per year, or about a third faster than at regional peers.
Following on from the State of small businesses report, Xero examined tens of thousands of businesses to see whether access to broadband and cloud-based apps supported revenue growth and employment. Among businesses on Xero, the data showed that those in mature regions grew employment by one-third more than peers in non mature regions. And businesses on Xero with at least one integrated app saw revenue grow almost twice as fast as peers with no apps.
In 2018, Xero made XSBI a truly multimedia platform with the introduction of Xero Small Business Insights TV. Here, a difference small business was interviewed each month to to get an up-close, in-person look at trading conditions.
XBSI can provide valuable insights to small business trading conditions and we recommend small business owners to keep a look for these monthly reports.
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This article is an extract from the Xero website and is written in general terms and therefore cannot be relied on to cover specific situations; application of the principles set out will depend upon the particular circumstances involved and we recommend that you obtain professional advice before acting or refraining from acting on any of its contents.