Banks have topped the list of companies that are throwing money away on unnecessary costs, wasting up to 10 per cent of their revenue each year according to a survey from the Chartered Institute of Management Accountants (CIMA).
Over a third of respondents from the banking industry claimed their companies’ waste between five per cent and 10 per cent of revenue every year, and a further 38 per cent admitted that there was very little adherence to cost-saving within their organisation.
In total British firms recklessly spent to the tune of £194bn in 2015, a figure that could cover the cost of the NHS for a year, or pay for almost five HS2 high speed rail lines.
The careless spending has been put down to inefficient systems, delayed or cancelled projects, and over-payment for goods or services.
The average over-spend for companies in the UK stood at 5.2 per cent of revenue last year.
Just over half (53 per cent) of the 2,000 accountants polled admitted their organisations lack any kind of strategy to be cost competitive.
“Lack of a cost-conscious culture is a threat to UK competitiveness – we can be as innovative or as creative as we like, but if our products and services cost too much we will not be maximising our profits, and we are at risk of losing out to cheaper competitors,” said Peter Spence, CIMA's head of performance management research.