Pressure on small businesses is growing with invoices taking longer to be paid and staff numbers still below pre-pandemic levels, an analysis of half a million companies has found.
The accountancy software firm Xero has aggregated data from its small business customers and found a rapid rise in late payments since the start of the year. Invoices were paid 8.2 days beyond their payment terms, up by 2.5 days since January and the highest figure since August 2020.
Hospitality remains subdued, supporting 22.7 per cent fewer jobs than two years ago, while small
manufacturers have also been unable to return to pre-pandemic levels of employment, down 15.1 per cent. Wage bills increased by 4.3 per cent in February, the highest recorded rise since the survey began in 2017, reflecting rocketing inflation and the tight labour market. Employers providing hospitality recorded wage rises of 7.7 per cent.
However, the companies did register stronger sales in February, up 8.8 per cent compared with the same month in 2020, with particularly strong growth in the northwest of England (11.4 per cent) and the east of England (10.7 per cent).
Experts say that sustained sales growth is an encouraging sign for small businesses, but will that money go far enough in today’s current climate? It doesn’t offset the other challenges they face, and it will be difficult for them to fully recover from the pandemic until they can get the right people on board.
