Home Business News Pandemic forces businesses to pick sides

Pandemic forces businesses to pick sides

by LLB Finance Reporter
3rd Sep 21 7:04 am

Digital accounting platform Dext analysed over 100 million anonymised business transactions across 250,000 British businesses between 2019 and 2021 revealing how businesses spent their money during the pandemic. The  spending data shows how the pandemic has shifted the digital landscape for small businesses, with many switching spend to Facebook and Microsoft over their rival  providers.

To adapt to the covid crisis, businesses changed how they spend their money, moving away from fixed asset costs like property and spending more on outsourcing, software, and technology.

Software and technology spending rose 66% above pre-pandemic levels with a boom in digital advertising. Facebook rapidly closed the gap with Google to be the advertising platform of choice for businesses with c. 250,000 businesses spending over £100m in 2020, with Google rapidly falling away to Facebook’s level, as the pandemic struck.

Likewise, from 2018 to 2020, Citrix’s growth in UK business spending per transaction was out-stripping Microsoft, only for the cloud provider’s UK business sales to rapidly tumble below Microsoft in the latter part of the year, with the UK businesses analysed spending less than £200million on the platform.

Microsoft was the only software provider to grow average spend throughout the year, leveraging its broader product range to grow Q1 2021 average spend by 13%. By comparison, the Slack Q1 2021 average spend fell 27%, and the Zoom 2021 average spend fell 13%.

There’s also signs UK businesses are favouring Microsoft over Apple. For while Apple is enjoying a greater spend from businesses in the UK in August 2021 with a slender lead of £990,012 in UK business spending, at the same time last year, this was a difference of £1,499,468 2020. In 2019 this difference was £1,603426 in favour of Apple.

Spending in the UK steadily increased on online takeout services Just Eat, Deliveroo and UberEats throughout the pandemic with businesses spend per transaction nearly doubling for JustEat, making it the favourite delivery platform for UK food and hospitality businesses. However, total business spend on Deliveroo has rocketed to challenge Just Eat’s prime position.

Adrian Blair, CEO of Dext, said: “Our research showed businesses responded rapidly to the crisis, and in tough times knowing your customer’s priorities is critical. Businesses need standardised data, line by line, from multiple sources to calculate tax.”

Other findings of the poll found that the Royal Mail remained favoured by UK businesses, but FedEx had a 1166% increase in spending in August 2020 after being low for the whole year (including pre-pandemic), and DHL Express had a 899% spike in February 2021 (compared to December 2020-February 2021).

The Dext research was conducted in the UK, USA, Canada, France, South Africa, and Australia and included data from nearly 250,000 British businesses.

While the impact of COVID-19 on UK businesses has been significant, with the report noted that 44% of businesses are cutting jobs and two thirds seeing revenues decrease, there are signs of optimism in the spending data. Overall, UK businesses have shown increasing resilience throughout the pandemic. Successive lockdowns have had diminishing effects on spending, and overall spending in the UK  now sits well above pre-pandemic levels.

Dext is used by British businesses, their accountants and bookkeepers to track business costs to manage tax and cashflow.

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