(25.06.2025, Singapore) Despite a challenging operating environment, Singapore’s small and medium businesses (SMBs) remain resilient and focused on growth through digitalisation, according to a new report by global small business platform, Xero.
Polling over 500 owners and senior decision-makers from SMBs in Singapore, the report found that 6 in 10 (61%) have been impacted by inflation and rising costs, alongside changes in consumer demand (48%) and labour shortages (44%).
Despite this, Singapore’s SMBs continued to grow, with nearly two-thirds (63%) reporting revenue growth and 77% reporting wage increases over the past year. Nearly half (47%) increased headcount within the business, primarily to support business growth (69%). Crucially, 76% of business owners said they feel optimistic about the future.
“It’s exciting to see such strong optimism and momentum among Singapore’s SMBs, especially in a tough economic climate. Their continued investment in people and technology shows just how focused they are on building for the future,” said Koren Wines, Managing Director of Xero Asia. “That said, as businesses continue to scale and grow, it’s important to recognise that many still face operational barriers that can slow progress—whether it’s managing cash flow, accessing real-time financial insights, or juggling fragmented systems. Addressing these pain points and building stronger digital foundations will be key to unlocking greater efficiency, agility, and long-term success.”
Overcoming operational challenges and leaning on digital tools
Even as Singaporean SMBs gear up for growth, the report identified common operational challenges they will need to overcome, such as strained cash flow from delayed payments.
91% of Singaporean SMBs said late payments from customers have impacted their business. When polled on typical payment timelines, nearly a fifth (18%) of businesses said they received payments from customers in an average of 31-45 days, with timelines stretching to 46-60 days for 7% of businesses surveyed. To increase the likelihood of timely payments, many SMBs have started strengthening credit terms, charging late fees, and even offering discounts to incentivize early payments in a bid to keep cash moving.
Moreover, many SMBs still struggle with establishing long-term, real-time visibility on their business’ finances. 81% of Singaporean SMBs recognize the importance of customizable financial reports that contain insights that may be useful for regulatory compliance and strategic decision-making. However, around half cite a lack of real-time access to financial data, and difficulty consolidating information from multiple sources as key barriers to developing them.
To overcome these operational challenges and support growth, Singaporean SMBs are actively using digital tools such as digital marketing platforms, customer relationship management systems and cloud-based accounting or finance software.
They believe digital tools are essential to their business, while 82% cited digital adoption as a top or significant business priority. They said they were comfortable experimenting with or implementing new technologies, with the ability to generate better reports, enhanced decision-making, and automation of repetitive tasks topping the list of motivations driving adoption.
Said Wines, “Singaporean SMBs have shown a strong appetite for digitalisation—not just as a means to keep up, but as a deliberate strategy to drive growth and resilience. They increasingly understand that digital tools are not simply operational add-ons, but enablers that can transform the way they manage cash flow, streamline processes, unlock opportunities and respond to evolving market demands.”
“By adopting the right technologies, small businesses can gain deeper financial visibility, make faster, data-driven decisions, and build the agility needed to thrive amid uncertainty. This shift isn’t just about staying compliant—it’s about becoming future-ready.”
