Small businesses are missing out on a whopping £502 million each year by sticking with banks that don’t give them the best deal on their current account, according to new research from Alliance & Leicester Commercial Bank.
The research found that it is the crippling fees for handling cash that are costing businesses with a turnover of less than £1 million a year the most. Collectively, the country’s small businesses could claw back nearly £300 million on cash transactions alone if they chose to shop around for lower charges.
The research found that the average business spends around £425 on cash transactions each year, when they could be paying around £80. In addition, businesses could save more than £202 million on non-cash transactions such as direct debits and standing orders when they could be receiving these services for free.
Companies in business services, retail and construction are collectively missing out on £245 million by not shopping around. And businesses in the south-east are the hardest hit, missing out on nearly £89 million, while London businesses are wasting nearly £70 million each year.
Says Steve Jennings, Director of Business Banking at Alliance & Leicester Commercial Bank: “The country’s small businesses are short-changing themselves. Whilst working hard to make money and grow their companies, they are neglecting to review how their hard-earned cash is treated.”