What are European companies investing the most in 2023?
The state of company spending has been on a rollercoaster of a journey over the past few years. As businesses navigated lockdown after lockdown to then entering a time of financial uncertainty with a looming recession in sight, spending habits have shifted like never before.
Today, the focus for many companies has been placed on growth efficiency over hyper-growth, meaning smarter spending where budgets are at the forefront of every decision.
We’ve been taking a look back at our customer’s invoice spending data based on categories from November 2021 to April 2023 to find out what businesses in Europe are investing more and less in, and what categories have been put in the backseat for the time being.
Marketing and advertising spend dropped earlier this year
Overall, business spend on marketing and advertising has seen a steady decline since January 2022. And up until the most recent months, stretching from January 2023 up until now, this spend category is seeing even more of a decline as the recession sits on the horizon.
This doesn’t come as the biggest surprise. Reports from earlier this year suggested that ad budgets were set to fall even more into 2023. According to Standard Media Index (SMI), ad spending dropped by 6% year-over-year in January. This steady decline is set to keep on decreasing as we move further into the year, and it’s a trend we’re spotting with our customers too.
Spend on travel is stabilising
Travel spend has arguably seen the most fluctuation over the past few years. In 2020, teams everywhere worked with tools like Zoom for their big strategy meetings to their awkward Friday afternoon team socials. As we fully set into normal life again, spending on travel increased, and it’s finally starting to even out.
There’s no denying the power of remote and asynchronous work, and if we learnt anything from 2020, it’s that most teams out there can work just as efficiently from the comfort of their own homes. Not only giving people the power to manage their own time and workload but also saving the business money on flight tickets.
We’re seeing a trend that seems to be putting an emphasis on conscious travel, and not just for the sake of it. Companies are more open to working remotely, but there will always be those conferences or meetings that need to be done in person.
Stay on top of travel spending with Pleo’s Expense Policy Builder
Keeping everyone on the same business spending page doesn’t have to be rocket science when it comes to travel, even if your teams are based all around the country or work from their home offices. The easiest solution is to keep everyone in the loop when it comes to what they can spend and how much it is by having an accessible expense policy that covers all the basics.
And we’ve got you covered with our Expense Policy Buider, a quick and easy tool that’ll set the foundations for your spending limits.
Software spend is dropping overall
You know how it goes; there’s an app for everything, and the same applies to your business tech stack, too. Since October 2022, businesses in Europe have been spending less on software, and this could be for an array of reasons. Firstly, we’re seeing more and more businesses implement an office rota, meaning teams need to be in the office at least two or three times a week. With more face-to-face opportunities, there’s less of a demand for software built solely for remote work, something a lot of companies relied on over the last few years.
Secondly, budgets all around Europe are getting cut, and the first port of call is usually slim on the software that teams rely on.
How Pleo Subscriptions can keep your software in line
Keeping track of all your subscriptions is tricky business. From finding who is the owner or an account to making sure you’re not subscribing to a tool that’s similar to one, you’re already using. With Pleo Subscriptions, you can, and stay, in control of your recurring business payments.
Expenditure on equipment and hardware is rising
While software expenditure seems to be dropping, since September 2022, spending overall on equipment and hardware has been increasing. And the same applies to general office expenses, too, as more and more companies are asking teams to return to the office on a regular basis. To encourage this, it’s likely that businesses are investing in making their office space a place where people want to work from.
Diving deeper into your spending and analytics leaves room for your finance teams to spot areas where you can be saving but also areas where you can be investing more for your team. In this case, it could be in the form of upgrading equipment so your team can do their best work.
Invest smarter, not harder with Pleo
It’s likely spending trends will keep fluctuating as we head further into the year and navigate the financially uncertain times. But with tools like Pleo that allow finance teams to dive deeper into what the company is spending on and where, it’s never been easier to stay in control of spending.
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