Published on the 14/04/2016 | Written by Newsdesk

One of the advantages that a cloud software provider has over on-premise vendors is that it holds the data of all its customers ‘server-side’. While that once made some nervous, it can have considerable advantages, as Xero has made clear with a new service dubbed Xero Signals. This gives small businesses ‘access to an unprecedented level of data’, said the vendor in a statement; housed at xero.com/signals, it said the information ‘represents a true signal of the state of New Zealand’s small business economy’.

Xero Signals is based on aggregated data from almost 10,000 businesses across the country and surveys of approximately 500 nationally representative small businesses and 1300 Xero customers.

Xero MD Anna Curzon said the data can help small business owners understand how they’re faring, compared to a larger segment of the market. “By drawing insights from aggregated data, small business owners can use Xero Signals to make clearer business decisions and plan for the future.”

A worrying trend revealed in the data is a major movement in the number of days invoices are overdue. The data reveals that 40 percent of invoices are more than a month overdue, which alone is a concern from a cashflow perspective, but more revealing is that this figure is up from 25 percent overdue last year. Given the empirical nature of the data this should have economists digging deeper.

Curzon said the insights will enable small businesses to assess their operations using comparative insight from thousands of other similar sized organisations. “It’s also valuable for advisors, helping them see how their clients are navigating challenges and opportunities. The data shows how much opportunity there is for small business owners to tighten their operations, become more efficient and grow.”

Insights highlighted in the first release include:

• Seven out of ten small business owners do not want to grow their business. However, 83 percent want to improve efficiency
• Less than one in ten small businesses have an accountant and only one in three small businesses have a business plan
• Small business revenue declined compared to last year but profits are steady
• 40 percent of invoices are over a month overdue, up from 25 percent at the same time last year
• Businesses should consider lower stock holding levels, so they don’t tie up money on products they can’t move
• Small businesses should consider growing their online presence – 78 percent of New Zealanders aged 18 years and above make online purchases, but only 15 percent of small businesses have an online shop.

Xero said its Signals insights will be presented in tabular and graphical format with advice on how to use it, implications and learnings for small businesses.