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Almost half of Kiwi small business owners unable to pay themselves


Tight cash flow, high inflation, rising interest rates and reduced customer sentiment are costing small businesses and sole traders, says Xero.

By Josh Needs 12 minute read

Cash flow blockages and worsening economic conditions have left almost half of New Zealand small business owners unable to pay themselves.

A report by Xero, Money Matters: navigating the impact of economic conditions on the cash flow of New Zealand small and medium businesses, found 46 per cent of business owners and 60 per cent of sole traders are not paying themselves in an attempt to keep their business operating. 

Xero New Zealand country manager Bridget Snelling says the report reveals the significant financial stress small business owners and sole traders are facing. 


“Cash flow is one of the biggest challenges small businesses are facing. When you add in inflation, climbing interest rates and reduced spend from consumers, small business owners are walking a tightrope every day,” said Ms Snelling. 

“When small business owners experience cash flow issues one of the first things to go is their own pay, followed by an instability to pay suppliers which has a ripple effect throughout the economy.” 

“It’s a systemic and volatile cycle, which sees business owners dipping into their own personal savings, working unattainable hours, and ultimately sacrificing their emotional and physical wellbeing to stay afloat.” 

The results are a close reflection of their Australian counterparts, which found 27 per cent of businesses used personal savings to stay afloat with one-third (34 per cent) unable to pay themselves. 

Xero said late paid invoices were one of the largest contributors to the cash flow struggles of small businesses with delayed invoice payments costing Kiwi small businesses $456 million annually. 

“Getting paid on time is crucial for small business operations. Unlike large businesses, SMEs don’t typically have the working capital available to manage the sometimes ridiculous time between doing the mahi and getting paid for it,” said Ms Snelling. 

“Ultimately, we need bigger businesses to pay their invoices on time.” 

“Xero challenges all businesses to commit to paying invoices within 10 working days to help strengthen the New Zealand economy while supporting suppliers and customers in the small business community.” 

Small business owners said they had felt the emotional and physical impacts as a result of the tight cash flow and conditions over the past 12 months, with 80 per cent reported feeling stress, 70 per cent anxiety, 60 per cent experienced sleep issues, and 47 per cent lost time with friends and family. 


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Josh Needs

Josh Needs


Josh Needs is a journalist at Accountants Daily and SMSF Adviser, which are the leading sources of news, strategy, and educational content for professionals in the accounting and SMSF sectors.

Josh studied journalism at the University of NSW and previously wrote news, feature articles and video reviews for Unsealed 4x4, a specialist offroad motoring website. Since joining the Momentum Media Team in 2022, Josh has written for Accountants Daily and SMSF Adviser.

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