It’s no longer a growth-at-all-costs environment—but that doesn’t mean the need for business growth has completely disappeared.
As a result, in Q2, we see companies trying to strike a delicate balance between growth-oriented spending and cost cutting measures for potentially tough times ahead. Our newest report, 2022 Q2 spending benchmarks, sheds light on the tough tradeoffs that finance leaders are being asked to make.
What you’ll find
Data on how business spending has shifted quarter-over-quarter
Spending in Q2 grew at a faster rate than in Q1. But while we saw transaction volume rise in most major categories, there were some notable exceptions. Companies held back on electronic spending, and fluctuating transaction volume month-over-month reflects uncertainty about the economy.
A closer look at how spending priorities change with company size
Differentiated spending patterns emerged when we cut expenses by company size. SMBs invested in general merchandise and T&E, but cut back drastically on electronics. Mid-market companies also saw a sharp increase in T&E spend while keeping their ad spend flat. Enterprise companies balanced increases in shipping and software expenses by reducing professional services.
Insights on how companies are adjusting their ad spend
Overall share of ad spend dropped 3.4pp on Ramp cards as compared to Q2 of 2021. Mid-market companies were the biggest driver of this decline, indicating that they are aiming to curb growth-related expenses. On the other hand, we saw enterprise ad spend tick up in the second quarter, with the average customer increasing spend by 17.7% in Q2.
Signs of optimism and uncertainty in T&E spending
On average, companies spent 46.7% more on T&E in Q2 vs. Q1. But that’s not the whole picture. While T&E transaction volume rose across the board, the average size of entertainment transactions decreased for nearly all business segments, indicating more discerning budgetary requirements for most companies. In June, we also saw companies tightening total allowable spend on business trips.
Get the full report
As you start to prepare your 2023 budget, download our report to see how your company’s spend compares with other businesses of your size or industry. Where do you need to trim costs? Where can you afford to spend more to stay on par with your peers’ investments? At Ramp, we’re committed to providing you with the financial intelligence and tools you need to optimize spend and drive long-term stability and success.