SMEs advised to keep track of cash flow

Small and medium-sized enterprises (SMEs) are being urged to keep track of their cash flow and ensure that they are operating tax and cost-efficiently at all times, after a recent study found that average SME expenditure now exceeds more than £1 million a year.

According to a study carried out by the Centre of Economics and Business Research (CEBR) in collaboration with American Express, the average UK SME now spends approximately £1,016,194 every single year.

This amount is typically divided between hiring new employees (24 per cent), paying suppliers (20 per cent) and upgrading or investing in technology (19 per cent) amongst other costs such as taxes, business rates and more.

The study also revealed that SME expenditure typically swells as businesses grow older – with companies that are 15-years-old or more likely to be paying out an annual figure closer to £1.5 million.

Meanwhile, SMEs at the larger end of the scale – defined as those with 50 members of staff or more for purposes of the study – are spending even more, with average annual expenditure estimated to be around £3 million.

It also found that SMEs located in London were likely to be paying out three times as much as those in the North of England.

SMEs of all shapes and sizes are being advised to pay close attention to their cash flow, and to seek specialist advice when in doubt.