The Many Reasons Why Managing Company Spending is Critical
Updated: Apr 4
Haslle takes company spending seriously. Huge changes are coming to how businesses handle expenses, subscriptions, and cash in general.
Automation and new payment methods are taking over, so stay tuned.
How do businesses spend their money? We've put together 100 stats that we found on company spending. Here's the first one:
82% of business failures are due to poor cash management. It makes sense - no cash means you can’t pay people.
Here are some other cool stats on the way companies spend their money.
Subscriptions and SaaS Tools
Another booming trend is the increasing reliance on SaaS (software as a service) tools. These platforms enable companies with solutions for everything from CRMs to social media automation, without the need to build them on their own.
Annual SaaS spending worldwide is expected to surpass US$85 billion by the end of 2019. (ZDNet)
Average medium-sized company spends US$20,000 per month on SaaS tools. This number is projected to grow 118% by 2020. (Blissfully).
Average company changes its subscription stack by 43% every year. (GlobalDots)
The average company spends US$343,000 per year on SaaS tools. (Blissfully)
Cloud-based sales CRMs now account for 84% of spending on sales CRM deployment. (Gartner)
Spending on marketing automation tools is projected to exceed US$25 billion by 2023. This will grow from US$11.4 billion in 2017. (Forrester)
55% of CMOs plan to increase spending on marketing technology in the next year. (Marketing Dive)
SaaS tools are deployed by virtually every business team, led particularly by engineering and sales:
The “SaaS revolution” is coming, and this market only promises to grow more in the coming years.
Office Expenses and Team Benefits
Daily, companies need to spend on goods and services to keep employees happy in the office. This can include drinks and team buildings on a Friday evening.
But as employees start to get used to more elaborate benefits, the importance of their management grows for business owners.
86% of U.S. employers give financial incentives to employees who participate in well-being programs, with an average incentive of US$784. (Fidelity Investments)
80% of workers would rather stay in a job with benefits than take one that offered more pay but no benefits. (American Institute of CPAs)
Instead of snacks and massage, more Americans feel that contributions to pensions (401(k)), health insurance, and paid time off are the most enticing perks. (American Institute of CPAs)
Employers increased spending on training in 2017, up nearly 2% to $1,296 per employee. (ATD)
Many of these offers are beginning to move from “team perks” to becoming almost essential. Especially if companies want to attract the best talent available.
Taxes, legal fees, and startup costs
Doing administrative expenses often takes up a lot of time.
The average British startup spends £22,756 in its first year on set-up and administrative costs. This doesn’t include payroll, product development, or marketing costs. (The Telegraph)The above figure includes £6,259 for legal fees, £3,937 for accountancy, and £5,518 for company registration and other such costs. (The Telegraph)
28% of small businesses report spending more than US$10,000 per year on taxes, legal fees, and associated costs. (Score)
The average spend on legal fees for companies is 0.38% of total revenue. (Hurley Gunsher)
Marketing and advertising spending
Companies dedicate significant sums to marketing and advertising.
In fact, marketing budgets equal 11.2% of company revenue on average, and have been mostly steady in recent years. (Gartner)
Gartner also found that nearly one third of marketing budgets (29%) is spent on tools and technology. This number is now higher than marketing labour costs:
Content marketing was projected to account for more than US$300 billion in revenue in 2019. (Statista)
93% of the most successful B2B companies were very or extremely committed to content marketing. (Content Marketing Institute)
The same study found that 77% of the most successful businesses rely on buyer personas for content marketing, compared with only 36% of the least successful. (Content Marketing Institute)
In 2018, 71% of B2B customers said they read blog content before buying. (Demand Gen)
Digital advertising is now worth US$30 billion more per year than television advertising. (Brafton)Nearly 20% of all advertising spend worldwide goes to search platforms. Google obviously dominates this field, and this doesn’t even include paid social. (B&T)
Global spending on paid digital marketing was estimated to be around US$100 billion in 2018. (Reuters)
Businesses spend on average 21% of marketing budgets on advertising, with two-thirds of that advertising money now spent online. (Gartner)
Paid search advertising spend is growing 10% year-over-year. But click-through rates have fallen overall. (Search Engine Journal)
Google’s chief economist estimates that businesses make $2 for every $1 they spend on Google ads. (Google)The average cost-per-click on Google’s search network is US$2.69, while that number is only $0.63 on the display network (on-site advertisements). Interestingly, the legal industry has the highest average cost-per-click at $6.75 for search ads. (Wordstream)
U.S. companies spent more than US$13.23 billion on digital video ads in 2017, and that number is expected to exceed $22 billion by 2021. (eMarketer)18% of total Facebook spend went to Instagram, with 34% of that Instagram spend on Instagram Stories. (Search Engine Journal)
In 2017, global spending on business events reached more than US$1.07 trillion USD. (Events Industry Council)The average event attendee spends US$704 for each event. (Events Industry Council)The median amount spent by businesses to sponsor an event is US$20,000. (MarketingCharts) Survey found that 41% of marketers feel that events are their best channel, ahead of content marketing (27%) and email (14%). (Bizzabo)The above survey also discovered that 62% of marketers intended to increase their event budget moving from 2018 to 2019. (Bizzabo)
Companies spent US$1.33 trillion on global business travel in 2017. (Statista) That number is expected to reach US$1.7 trillion by 2022. (Statista) Americans spent US$317.2 billion on business travel in 2017, compared with US$718.4 billion for leisure travel. (U.S. Travel Association)90% of respondents in this survey felt that travel was essential to business growth. (TripActions)57% of work travellers would prefer to book with a single app or tool. (Booking)30% of those who fly for business do so every single month. But 62% of flyers only take wing once a year. (Fly Aeolus) North American companies expensed more Uber trips than payments to any other company. (Business Traveller).
Research and development
Global R&D spending is now almost US$1.7 trillion per year, with 80% of that coming from just 10 countries. (UNESCO)
Countries in the European Union spent more than €320 million on R&D in 2017 - 2.07% of total GDP. (ec.europa.eu)
Amazon spends far more on research and development than any other company. The amount spent surpassed US$22.5 billion in 2018, $6bn USD more than second placed Alphabet. (Strategy&)
Company spending matters
Companies spend huge amounts on everything from marketing to taxes. New tools are emerging, businesses are investing more in office perks, and software tools and advertising is growing quickly too.
But managing all this spending is challenging. That's why we started Haslle to fix it.
If you'd like to learn how to give your team more flexibility, while also gaining more visibility and control over your spending, let's have a chat.