Xero’s Roadmap to Recovery manifesto launched

by Startacus Admin

Xero’s Roadmap to Recovery manifesto launched as new data confirms impact of COVID-19 on UK small business revenue and employment...

New analysis from Xero, the global small business platform, has revealed the extent of COVID-19’s impact on UK small business employment and revenue between March and May 2020, showing a 28 per cent drop in revenue and a six per cent decline in employment. Late payments to UK small businesses increased by 7.8 days between February and May 2020. 

Based on anonymised and aggregated data from Xero customers in the UK, Xero’s Small Business Insights (SBI) reveals a significant downturn in revenues and jobs during the period and examines the data across industries and regions. The new findings underpin Xero’s Roadmap to Recovery manifesto, launched to call for extra government support to help SMEs rebuild. 

Xero SBI payroll data indicates that small business employment has fallen by six per cent on average between March and May 2020, even before the Government’s Coronavirus Job Retention Scheme reduces its support over the coming months. 

And, although the impact of COVID-19 has been felt across the country, the data showed that small businesses in the East Midlands suffered from the most job losses, with a 3.7 per cent fall in April and 8.5 per cent fall in May. Comparatively, small businesses in the South of England saw a 6.3 per cent fall in job losses in April, and a 0.1 per cent fall in May.  

The data also found that invoices are taking longer to be paid, with the average time for small businesses to be paid increasing sharply by 7.8 days since February (from 30.7 days to 38.5 days). With late payments already a point of concern for small businesses, longer payment times are likely to compound the cashflow stress.

Roadmap to Recovery

Following the analysis of this customer data, Xero has identified the key areas of government support needed by small businesses in order to rebuild. The Roadmap to Recovery policy recommendations, covering technology access, digital skills development and strengthened local communities, include calls for 30 days payment terms as standard, digital tools tax relief, improved regional internet access and an offset of technology expenses against tax. 

“The pandemic has had a devastating impact on business. As our customer data shows, jobs are being lost and the creation of new ones will depend on how quickly the economy can be rebooted.” said Gary Turner, UK managing director of Xero. 

We’re sharing our Roadmap to Recovery manifesto today which calls on the government to provide this support and to lead the upgrading of small business infrastructure to support recovery and enable SMBs to be better prepared for new threats.

With the right support, small businesses will be able to provide much-needed job opportunities and a vital economic boost for the UK.” 

In terms of payments for small businesses, Philip King, Interim Small Business Commissioner added:

It is imperative that businesses work together as partners and create a culture of good payment practice. Looking at their supply chain to identify the most vulnerable and ensure they are supported will mean those suppliers are still there to support them when the crisis is over. This will reduce damage to the economy and will eliminate the risk of reputational damage.” 

For more information about Xero’s Roadmap to Recovery manifesto, visit www.xero.com/behindsmallbusiness. 

 

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Published on: 1st July 2020