THE TRUTH REVEALED: The REAL Impact Of COVID19 On Business Spending
Businesses across the UK have had a ROUGH time managing their finances throughout the COVID19 pandemic, but what has REALLY been going on? What is THE TRUTH behind COVID19’s impact on business expenses across the nation? Find out here.
Virtual bookkeeper, DEXT, – analysed their internal data, and cross-referenced their findings with the UK’s COVID19 timeline. Their findings revealed the different ways in which business expenditures have changed in response to lock-down(s), key COVID19-related announcements, restrictions, and other circumstances.
Overall business spending increased from an average of £801 per submission in May 2020, – to £947 in May 2021.
Rent also became an issue for businesses: abandoned offices left many companies having to redirect their spending. For instance, in May 2020, businesses were paying an average of £2,873 per submission in rent, dropping to £2,048 in November 2020. This then rose again, with companies spending an average of £2,795 on rent (per submission) in May 2021, as companies began to reopen.
Business finance protection spend also rose significantly: in May 2020, companies paid out an average of £3,001 per submission for insurance, increasing to £4,882 per submission in November 2020, to £5,576 in January 2021 (driven by lock-down), to £5,373 in April 2021, and to £4,534 in May 2021.
Another cost was health: suddenly, offices had to come fully-equipped with masks, gloves and hand sanitiser, not to mention in some cases, – the labour and construction costs required to implement new safety screens and social distancing practices. At the start of the pandemic, businesses were spending an average of £304 per submission (in May 2020). However, this rose once non-essential businesses reopened in June 2020, to £809 in July 2020.
And understandably, cleaning costs rose: similarly, these figures rose in accordance with lock-downs: the second lock-down led to overall cleaning expenses rising from £190 on average (per submission) in September 2020, to £384 in October 2020. Overall, cleaning workspaces added up to a whopping average of £2,923 per submission.
And as to be expected in the new remote-working era, tech also became a huge focus: in comparison to May 2020 (an average of £397 per submission), small businesses across the UK spent 74% more on computer equipment per average monthly transaction in January 2021 (which went up to £690).
So what can we take from this data? For us, it’s obvious: whilst sales have dropped for many businesses during the COVID19 pandemic, expenses have risen against these drops with new hidden costs, such as cleanliness, tech, insurance and sanitiser. That being said, the businesses that thrived online have been more able to keep up with these new rising costs.