A new report has found Canberra is the best place in Australia to run a small business.

The report by digital accounting software company Xero found the ACT had the highest percentage of growth in small business employment of all states and territories from October 2016 to October 2017, according to The Riot Act.

Small businesses in the ACT are some of the fastest to be paid, with an average of 31.35 days for invoices compared to a national average of 34.94.

Xero Australia Managing Director Trent Innes said the ACT’s growth was a “testament to the conditions for business”.

Xero, a digital accounting software company, compiled a year of data across metrics such as payment times, cash flow, hiring and overseas trading.