Cloud accounting technology company Xero has warned of another year of volatility for small business customers.
Xero chair David Thodey said on Thursday supply chains remain constrained, contributing to levels of inflation not seen since the 1980s, interest rates are rising, and global economic growth is predicted to slow.
"Despite these pressures, we are seeing small businesses continuing to be the employment engine room, and their resilience is as strong as ever," he told the Xero AGM on Thursday.
However, he said growth in the UK customer base was "more subdued" than Xero would like.
The outlook for FY23 was unchanged, with total operating expenses forecast at the lower end of the 80-85 per cent range.
Xero shares were down 6.1 per cent or $5.97 at $91.63 in afternoon trade.
The company has more than 3.2 million subscribers across Australia, New Zealand and the United Kingdom and sees opportunities for growth in North America.
"Looking across our operating regions, we can see a range of policy tailwinds," Mr Thodey said.
The former Telstra boss said the Albanese government has committed to a Tech Investment Boost, which gives small businesses a tax break on technology spending.
In the UK, the Making Tax Digital program is part of a push to build the digital economy, while Canada has launched a Digital Adoption program to help small businesses.
Despite a tight labour market globally, Xero said it increased its full-time equivalent staff by more than 1000 in FY22, mostly in product and technology areas.
Planday, a workforce management tool with more than 350,000 employee users across Europe and the UK, will be launched in Australia at the end of this year.
