It's beginning to look a lot like Christmas for small business

When you're in retail it's never too early to prepare for Christmas.

"I probably started thinking about Christmas in July at the start of the financial year," says Pippa Oostergetel, the founder of Melbourne boutique Squeak. "I start to really knuckle down then in October, November and December."

Oostergetel is hoping for a good Christmas based on strong October sales at the boutique, which has a turnover of under $500,000 a year and specialises in digitally printed silk scarves, clothing and homewares products.

She's not alone with Xero's Small Business Insights, provided exclusively to Fairfax on Tuesday, showing a total of 61.1 per cent of retailers were in the black as of Christmas 2016, far above the 54.6 per cent of all Australian small businesses.

Forecasts from KPMG suggest that figure will rise to 62 per cent this year as business health improves.

The research uses anonymised and aggregated data from more than 500,000 small businesses and in another indicator of pre-Christmas health shows late payments have dropped significantly during 2017, as large businesses begin to settle outstanding invoices with small business suppliers more quickly. Read more