"Financing projects from £50,000 to £100 million"

Small changes could save SMEs a small fortune

Small changes could save SMEs a small fortune

Small and medium-sized businesses are wasting the opportunity to generate £2 billion a year by not making small amendments to their financial arrangements, according to AXA Business Insurance.

SMEs could generate up to £1,435 each through minor changes, the insurer said, such as renegotiating a better deal on an overdraft or by holding spare cash in an interest-paying savings account rather than in a no-interest account.

AXA, which insurers around one in five small businesses, says that a third of small businesses earn no interest on their spare reserves.

With an account or bond that pays a modest level of interest – such as the Aldermore one-year business bond – the average balance of £7,879 could earn £145.76 that would otherwise be lost to apathy.

Darrell Sansom, Managing Director of AXA Business Insurance said: “What is very clear is that a huge number of companies could make small changes which would result in significant savings.

“While the areas we analysed focus on aspects of business which require additional administration and common sense, it is also instructive that only a little over a third of the businesses to which we spoke take any form of financial advice. With some professional advice, there are certainly even more savings that could be made.”

The report also suggested haggling for discounts, negotiating for better rates, and checking energy and telecom tariffs.

AXA’s data suggests that firms switching their energy provider save 30% (£400) on the average energy bill.

Likewise, it said that businesses were paying over-the-odds for broadband. The average bill was just shy of £500, despite the cost of broadband halving over the last two years.

It recommended that firms on an old contract were likely to be able to make significant savings by checking their tariff and either renegotiating their terms or switching to another provider.

Tuesday, 05 November 2013 13:21
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