Over half of Britain’s small and medium sized firms have admitted that the VAT increase has forced them to scrutinise their financials in a bid to cut costs.
According to a new survey from American Express, 56% of the UK’s small and medium-sized business owners feel under pressure to make savings, but are struggling due to the size of their company.
Of those respondents who claimed they are looking to cut back, 62% said that they miss out on the types of savings, discounts and rebates enjoyed by larger organisations.
The study also demonstrates that employee salaries and supplier costs are the areas of expenditure that financial decision-makers review the most - as on average £3,480 a year is spent on company expense users.
Katrina Cliffe, vice president and general manager of American Express UK, said: “Against the backdrop of the VAT increase and speculation about interest rate rises later this year, mid-sized companies are focusing more than ever on maximising business expenditure. “
However, despite the current economic conditions, 74% of business owners said that travelling to meet clients face to face remained critical to business success – leaving them in a quandary as to where to achieve cost savings while maintaining their competitive edge.
Cliffe added: “Travel and Entertainment costs typically account for an organisation’s third-largest controllable cost after salaries and IT, and our survey shows that small and mid-sized companies in the UK are keenly aware of the need to put an even greater focus on how to achieve the best value from suppliers, and from their overall company spend.”
© Crimson Business. Ltd 2011