Canberra, Australia — 13 August 2026 — New research from Xero, the global small business platform, reveals a significant financial confidence gap among Australian small business owners, leaving many without the skills needed to understand their numbers, manage cash flow and grow.
The research found more than one in three (35%) small business owners don’t often know whether they made a profit in the last month. It also revealed a sharp disconnect between how confident owners feel and what advisors see in practice. While many (85%) small business owners say they are confident in handling financial issues, 90% of accountants and bookkeepers believe small business owners lack the skills to manage the financial side of their business effectively.
In response, Xero today launched Xero For Good: Financial fitness, a free educational program to help Australian small business owners build financial skills through practical resources, mentoring and community support.
The program is also backed by the Xero For Good: Financial fitness taskforce, meeting for the first time today at Parliament House in Canberra. The taskforce brings together representatives from small business, finance, education, industry and advocacy to examine the barriers limiting small business financial confidence.
Xero’s research found:
- Almost a third of small business owners (32%) aren’t regularly paying themselves a wage
- When tested on 10 basic business finance questions, just 37% answered them all correctly
- More than one in three small business owners (35%) have turned to public AI tools for business advice, while 95% of accountants and bookkeepers believe small businesses receive financial misinformation, mainly from social media
- Three in four small business owners agree Australia’s education system does not equip future entrepreneurs with the financial skills they need to run a business, and 84% of accountants and bookkeepers agree
The research also shows financial ambiguity is taking a practical and emotional toll: 41% are too afraid to ask questions about financial management because they feel they should already know the answers, and 22% feel overwhelmed when dealing with business finances.
“Starting a small business is a leap of faith, but too many owners haven’t had the opportunity to set themselves up for success. More than one in three often don’t even know if they made a profit last month. That’s why we’re calling for financial education earlier, and bringing government and industry together to act on it,” said Angad Soin, Managing Director Australia and New Zealand and Global Chief Strategy Officer at Xero.
“Financial literacy shouldn’t be a privilege, it should be a right. Xero For Good: Financial fitness gives owners the chance to understand their numbers on their own terms, in five minutes on their phone, not buried in long financial theory at midnight or joining a webinar while they are trying to run their business. ”
Small businesses experiencing social or demographic disadvantages have significantly less financial confidence
The strain is greater for those facing social or demographic disadvantage. Three quarters (75%) say financial uncertainty keeps them up at night, more than 1.5 times the rate of those not facing disadvantage (48%). They are also more likely to be too afraid to ask questions (69% vs. 26%) and to ignore messages from the ATO if they don’t understand them (35% vs. 9%).
Dr Leanne Faulkner, small business mental health expert, said the findings reflect a deeper link between financial confidence and wellbeing. “The more financially literate a small business owner is, the better equipped they are to have control and make choices about work on their own terms. Those without these tools are more likely to feel it’s feast or famine. Financial literacy means exercising more choice, and that’s where a program like this can make a real difference.”
A free program to close the gap
At the centre of the Xero For Good: Financial fitness program is a resource hub, which includes bite-sized videos that can be viewed on demand in less than five minutes via mobile, and practical guides covering topics like cash flow, financial statements, budgeting and business finances.
The Xero For Good Ambassador Program will also connect small business owners with volunteer accountants and bookkeepers for free mentoring, helping them apply what they learn to their own business.
The third component of the program is the Xero For Good: Financial fitness taskforce. Drawing on Xero’s research, policy expertise and grassroots insight, the taskforce will explore practical ideas to strengthen national support for small business financial literacy. It will develop a set of practical recommendations for government, to be published in early 2027.
Starting members include:
- Verity Hare – Founder, Tradie Wives
- Carly Findlay, OAM – disability activist, writer and artist
- Greg Jennings – Chief Engagement Officer, Beyond Blue
- Jeanette Cheah – CEO and Co-Founder, HEX
- Adele Tahan – Pharmacist, Adore Compounding Pharmacy
- Amy Low – CEO, The Social Outfit
- Jarvis Archer – Restructuring Expert, Business Reset
- Ahmed Latif – Founder, Distinction Homes
- Huy Truong – Co-Founder and Executive Chairman, Thrive Refugee Enterprise
To learn more about Xero For Good: Financial fitness, visit https://financialfitness.xero.com/
ENDS
Media Contact
Xero Australia
Jess Brophy
+61 431 268 549
jess.brophy@xero.com
About the research
Xero commissioned this report in partnership with One Picture, an independent research agency, to examine financial confidence levels among Australian small business owners, and how accountants and bookkeepers perceive this in 2026.
The findings are based on discussions and a survey conducted between 20 March and 15 April 2026, with a random sample of 750 small business decision-makers, and 500 accountants and bookkeepers working in practice and serving small business and sole trader clients.
About Xero
Xero is a global small business platform that helps customers supercharge their business by bringing together the most important small business tools, including accounting, payroll and payments — on one platform. Xero’s powerful platform helps customers automate routine tasks, get timely insights, and connect them with their data, their apps, and their accountant or bookkeeper so they can focus on what really matters. Trusted by millions of small businesses and accountants and bookkeepers globally, Xero makes life better for people in small business, their advisors, and communities around the world. For further information, please visit xero.com.
About Xero For Good
In 2025, Xero established Xero For Good — a social impact initiative to empower small businesses with tools and support, to help with their long-term success and sustainability efforts. Xero For Good delivers impactful programs that strengthen communities through financial education, strategic growth funding, ethical supply chain practices, and essential carbon footprint management—creating positive change where it matters most. For more information, see Xero’s sustainability webpage.
Disclaimer
This media release includes and is in parts based on assumptions or estimates. It contains general information only and should not be taken as taxation, financial, investment or legal advice. Xero recommends that readers always obtain specific and detailed professional advice about any business decision. The insights in this release were created from the data that was available as at the date it was extracted. Data used was anonymised and aggregated to ensure individual businesses can not be identified.
Stay informed on fintech trends, banking innovation, and the future of digital finance.
