SMEs prefer companies that offer bespoke tech-savvy services
British small- and medium-sized enterprises (SMEs) are more inclined to spend on companies providing bespoke, technology-focussed services, digital bookkeeping platform Receipt Bank has found.
Its report – titled ‘The Battle for Business Wallets’ – is a global review of £126bn worth of spending by over 250,000 SMEs in the UK, US, France, Canada and Australia in the past decade.
Small British businesses are now spending over £23,000 annually on digital services from Facebook, Google and LinkedIn.
Read more: SMEs stockpiling £86bn of ‘dormant cash’
“Small British businesses are processing tens of billions of pounds of spending through Receipt Bank each year, giving us a good sense of how they are faring in the economy and confidence in their future,” Adrian Blair, chief executive of Receipt Bank, said.
“We are uniquely placed to give visibility online item spend data – which will become increasingly useful to SMEs as they digitise their operations.
“We produced this report to give British SMEs greater visibility over where businesses like theirs are spending their money.
“Clear insight into spending and finances is something small British businesses are only getting with companies that have digital services at their heart.
“The fast growth of providers like Metro Bank, Revolut, who have led the digital frontier in their sectors, is testament to this.
“SMEs want faster, effective and predominantly digital services, making their lives easier and helping them get on with their day to day activities.
“They should be provided with the latest tech, so that way they can manage their finances better, particularly at times of economic volatility, as we saw occur in 2019.”
Additional analysis by Receipt Bank shows how events such as Brexit negotiations and General Elections made for a volatile year for SMEs.
For example, SME spending per transaction hit an all-time low in August 2019 at £624.86 before rallying in October, just ahead of the General Election.
Read more: SMEs defy political uncertainty with improved business performance in 2019
British SMEs who rent WeWork office space have doubled their spend at the company in the past four years, registering (£56,055) with WeWork in 2019.
Growth in SME transactions with challenger Metrobank has outpaced that of its established high street competitors, with Revolut’s growth higher than Lloyds, NatWest and HSBC.
Small businesses are registering thousands of pounds of spend (£2,469 in 2019) with Amazon.
Tesco owned Booker bests its rival Bestbuy with more than five times the volume of transactions recorded through Receipt Bank.
Despite an eventful year for British SMEs, they are still one of the highest spenders compared to their counterparts around the world, with an average annual spend per SME of almost a quarter of a million pounds.
Read more: SME loan applications fell in third quarter