FDATA Member Spotlight: Xero
New Xero Data Highlights Challenges Facing Small Businesses in the U.S. and Canada
FDATA member Xero recently released the latest edition of its Xero Small Business Insights (XSBI) report, which analyzes anonymized data from hundreds of thousands of small businesses to better understand the economic trends shaping the small business landscape.
We spoke with Andrew Kanzer, Managing Director of North America, Xero about what the data reveals and why these insights matter for policymakers and the financial services ecosystem.
FDATA: What are the most important trends emerging from the latest XSBI report?
Andrew Kanzer: One of the clearest findings is the growing disconnect between strong headline economic indicators and the reality many small businesses are experiencing. In the U.S., sales growth averaged just 2.4% year-over-year in 2025, and growth slowed further to 0.9% in Q4. In Canada, sales growth has weakened to levels not seen since the pandemic.
FDATA: Were there any positive signals in the data?
Andrew Kanzer: Yes. One bright spot we observed was improved payment times. Late payments to U.S. small businesses fell to 7.8 days in Q4, the shortest delay in four years. That improvement in cash flow can make a meaningful difference for small businesses managing operating expenses.
FDATA: What do these trends suggest about the environment for small businesses heading into 2026?
Andrew Kanzer: Small businesses are operating in a more constrained environment. Demand remains soft in many sectors, and cost pressures continue to affect margins and hiring decisions. Access to tools that help businesses manage cash flow and financial planning will remain critical.
FDATA: Why is data like this important for policymakers and the financial ecosystem?
Andrew Kanzer: Data-driven insights can help policymakers better understand how macroeconomic trends are affecting small businesses on the ground. It also highlights the importance of financial tools that help businesses access insights about their finances, manage working capital, and make informed decisions.
Read the full report for Canada and the United States.
