Xero, the global small business platform, has released its latest Xero Small Business Insights (XSBI) data for Canada. The quarterly report provides key insights into small business health, tracking sales performance, late payments, and time-to-be-paid trends.
The latest data reveals that while time-to-be-paid is improving, small businesses continue to experience declining sales and worsening late payment delays. From July to September 2024, sales fell by 2.5% year-over-year (y/y) despite the Bank of Canada’s interest rate cuts aimed at boosting consumer spending. Meanwhile, late payments increased from 7.6 days in Q2 to 8.2 days in Q3, indicating ongoing financial strain.
Regional Sales Performance Declines
XSBI tracks data across British Columbia, Alberta, and Ontario, showing a consistent year-over-year decline in sales across all three provinces. Among them:
- British Columbia saw the largest decline at -5.0% y/y
- Alberta had the smallest drop at -2.6% y/y
“Our latest XSBI data highlights a challenging but important reality: interest rate cuts take time to flow through to the small business sector. 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,” said Louise Southall, Economist at Xero.
Navigating Economic Challenges
“Strong macro-trends continue to shape the sales performance data we see each quarter,. 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, said Mike Cascone, Vice President of Government Experience, Americas at Xero.
Xero is a global small business platform serving 4.2 million subscribers. It said its smart tools help businesses manage core accounting functions, tax compliance, bank reconciliation, payroll, and payments. Xero’s extensive ecosystem of connected apps and financial institution integrations enables small businesses to streamline operations and financial management.
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