New research across 24,000 businesses from spend management fintech, Soldo has revealed the key areas that UK businesses invested in during 2023, with green initiative linked spending on the up alongside wholesale shopping rising sharply as companies sought to cut spending by buying in bulk.
In the challenging and rapidly changing economic landscape, understanding where every penny is spent within a business is crucial. As threats of business failure show no signs of slowing, spending habits of workers and business leaders highlight how behaviours have changed in recent years and how they are responding to the pressure to both reward staff and balance the books.
2023 saw a surge in companies using electric vehicle charging stations, usage was up 83% and the individual spend for charging was up 15%. According to latest figures, the Green electric vehicle (EV) salary sacrifice arrangements are growing in popularity, up 68% in the third quarter of 2023 according to the BVRLA. Both the tax and sustainability benefit of this type of transport is highly attractive to businesses.
In addition, after years of COVID-19 grounding workers, business travel was on the rise, with a 17% increase in spend on train travel and a 7% increase on flights. Of the companies surveyed, Financial Services were the most likely to travel by air.
While the job market in 2023 slowed down, businesses still earmarked cash for retaining talent, investing into wellbeing at an individual level. According to the CIPD, investing in employee wellbeing can lead to increased resilience, better employee engagement, reduced sickness absence and higher performance and productivity. A global messaging platform provider customer of Soldo prioritises wellbeing spend and provides a perk programme where each employee gets £2,000 a year to spend on things that will benefit their lives.
Brandon Till, Director of Business Solutions commented on the report findings: “Despite the economic challenges we’re facing, businesses are starting to spend more, and it’s particularly heartening to see them focus on employee support and sustainability efforts.
“As businesses start to loosen their purse strings, it’s important to have the right technology in place to manage company spending. Finance can create a single source of spending truth, without relying on employees paying out-of-pocket or cumbersome reimbursement processes. Instead, businesses can liberate finance to help employees to accomplish more.”
Looking ahead, navigating the evolving landscape of business spending requires agility, foresight, and a keen understanding of every facet of business spend. Businesses must remain vigilant, adapt to changing circumstances, and leverage opportunities arising from technological advancements, market disruptions, and shifting employee behaviours.
To optimise spend management in 2023, Soldo recommends:
- Using a single source of spend management: consolidate your spend data so you can quickly and easier see where money is going and ensure finances are balanced.
- Track spend in real-time: stay on top of spending as it happens rather than waiting for month-end statements that may not be accounted for in forecasting.
- Make expenses easier for everyone: as travel and training spend grows, empower your teams to buy what they need to work while you stay in control.
- Improve compliance: seek ways to ringfence funds for key individuals, teams and projects, allowing teams access to finance with central control.
- Embrace automation: spend analytics have become crucial to growth, investing in technology means spending less time on administrative processes and more time on business strategy.