Xero lays out economic hit to small business at 'Xero on Air'

Between March and June this year 56 per cent of small businesses in Australia received COVID-19 wage subsidy payments, compared to 76 per cent in New Zealand and 52 per cent in the UK, says a pandemic insights report to be launched this week by cloud accounting software firm Xero.

The report draws on data from Xero's millions of small business customers and looks at how this market segment fared throughout Australia, New Zealand and the UK during COVID-19.

Despite each country offering support schemes, small firms in each experienced a substantial fall in revenue in these months, with small business revenue in New Zealand, Australia and the UK slipping 40 per cent, 11 per cent and 27 per cent respectively at their worst points.

But so far New Zealand's economic recovery has been V-shaped, while Australia's recovery to July was more like a W, but was still down year-on-year. The UK was shaping up to have a U-shaped recovery, with revenue down 27 per cent at its worst point and still down 13 per cent in July.

Xero is expecting more than 17,000 people to join its Xero on Air event, where it will debut a suite of new product announcements as well as the pandemic insights report.

Xero chief executive Steve Vamos said each of the countries had performed differently and the data demonstrated the interconnected nature between each country's number of cases, strategies for dealing with the pandemic, government stimulus packages and the degree of economic downturn.

"If you take a sharper, firmer approach, it's a short-term impact and you get a quicker response and rebound," Mr Vamos told The Australian Financial Review, .

"Our sentiment is always positive about the future and our passion is about getting more and more small businesses to adopt cloud technology.

"[Our research] showed that the more apps a business used in the cloud, the less impact they had on revenue and job levels. There is a direct correlation."

Despite the economic challenges, Mr Vamos said the pandemic could push more people toward starting their own businesses, as more and more people are forced to consider working for themselves.

According to data from the Australian Business Register, between May and June there were 150,084 new ABNs registered for sole traders or private companies - only 2000 down on same period in the the previous year.

To help these new business operators, Xero is launching a "refreshed" starter package, which gives a person access to unlimited bank feeds, enhanced cashflow forecasting and hubdoc for about half the price these services would have previously cost.

The $13 billion business is also launching a project profitability dashboard, enhancing its integrations with Stripe and GoCardless and setting out a roadmap for the future of its practice management tools for accountants and bookkeepers.

Each year Xerocon is the company's biggest event, attracting thousand of bookkeepers, accountants and ecosytem partners.

Mr Vamos said it would not be possible to capture the social interactions which make Xerocon a memorable affair, so Xero on Air had been designed as its own standalone event, rather than a replacement.

The company has filmed 35 videos that will be rolled out across the three days for attendees to view in their own time.

"It's like Xeroflix," Mr Vamos joked. "You can go and watch whatever episode is of interest to you. The important thing about these episodes is they don't take long to watch. We're already spending a lot of time looking at screens, so what you want is compelling, quick episodes that add up to a good experience."