In a recent analysis, SAP Concur reported that inflation has increased UK business expenses by nearly a quarter in the 23/24 financial year. These findings show a cost surge greater than double the inflation rate's peak in October 2022, with a 24% rise in the cost of the average expense transaction compared to pre-pandemic levels.

The increase in expense costs for UK-based employees was reported to be 7% higher than the global average. Findings highlighted a notable impact on the UK market due to inflationary increases. SAP Concur's data review involved thousands of UK businesses, enabling the identification of primary areas where businesses face the brunt of rising costs and hence shedding light on the sectors where inflation is eating into profits.

The review indicated that the main culprits leading to rising costs were air travel, entertainment, and car hire, with costs ballooning 39%, 36%, and 33%, respectively. Dining expenses also saw a significant rise of 32%. Air travel has emerged as the most significant expense for businesses, accounting for 23% of the total expense amount. SAP Concur's analysis shows that businesses face greater operating costs, often overlooked or not factored into the financial planning process upfront.

Matt Clementson, Head of Enterprise UK&I at SAP, said, "For all businesses, the costs of operating in the current global market have become trickier with time, and the 23/24 financial year was no exception. As the end of the year approaches, finance managers and business leaders need to analyse their outgoings, forecast for the next financial year, and re-evaluate policies to deliver a more robust year ahead."

Effective management of finances in the 24/25 fiscal year will require finance leaders to seize every spending opportunity to steer through these turbulent times. The introduction of expenditure management systems is one strategy that leaders should consider. Steps such as augmenting expense compliance monitoring, enhancing visibility, or fostering data-driven decision-making can help finance leaders take active measures to gain better control in the new financial year.

SAP Concur's analysis underscores the significant impact of inflation on UK business expenses, with costs soaring well above pre-pandemic levels. As companies navigate these challenging times, proactive financial management is imperative for sustaining profitability and resilience. By embracing innovative solutions and adopting data-driven approaches, businesses can better position themselves to navigate the complexities of the evolving economic landscape in the upcoming fiscal year.

SAP Concur is a provider of integrated travel, expense, and invoice management solutions. It offers cloud-based software designed to streamline and automate various aspects of business travel and expense reporting, helping organisations manage costs more effectively and efficiently. SAP Concur's platform enables businesses to capture, track, and analyse spending, ensuring compliance with company policies and regulatory requirements.