Brexit: Three things finance teams need to think about now
Finance teams likely have several concerns about what the impact of Brexit could be. And now with an end date looming, Dan Mizon from the Access Group shares his top tips on how to prepare your finances with Brexit in mind.
It’s been nearly three years since Britain voted to leave the EU, but things remain as unclear as ever. With more backstabbing than an average episode of Game of Thrones, the bitter struggle to carry out Brexit has left many normal folks in a flat spin.
Of course, everyone is strapped into this political rollercoaster, but for a finance team that has European staff and/or supply chains, though, there’s even more to consider. And with a final decision looming, there isn’t long left to prepare.
Let’s take a look at three particular areas of concern.
Supply chain management
With a wealth of uncertainty surrounding the potential Brexit outcomes, it’s essential to ensure you can introduce some flexibility into your stock and supply chain management processes and prepare for any potential challenges.
Any business with a supply chain that’s connected to Europe (i.e. most) should take appropriate measures. Remember when fast-food chain KFC faced supply chain issues and ran out of chicken? Not ideal for a restaurant chain that specialises in fried chicken. Take the proper precautions to ensure your business is not at risk of a national disaster.
Whether you run a pharmaceutical firm and rely on importing medicines or you have a crucial raw ingredient that usually enters the UK via Dover – you need to ensure you have prepared for and accounted for any additional costs by topping up the company cash reserves.
This cash reserve will cover the need for a more expedited form of delivery – if necessary – or will at least tide you over should you need to buy domestically at a higher cost until a new solution is put in place.
Investing in a technological tool which allows you to have a holistic, detailed and systematic view of your stock, will ensure you can adjust stock levels in response to any problems – so no matter what happens, you’ll be prepared.
Rights for staff
While it currently appears that most rights that European nationals currently possess will be protected (for now, at least) following Brexit, nothing has been set in stone in regards to what the situation will look like in the longer term.
If EU nationals make up your finance team, it would be advantageous to put plans in place which ensure that their work will be covered in the event of resignation due to their decision to relocate.
Another aspect to consider and prepare for is the possibility of higher staff turnover. If somewhere down the line it is revealed that EU nationals’ rights are not protected after the transition period ends, a wave of migration away from the UK can be expected.
If this happens to be the case, your business should take the costs of lost management time into consideration. This could include, but not limited to; spending an increased amount of time on new hiring processes and an influx of onboarding costs such as training.
The one major hallmark of the last few years of Brexit chaos has been the vast feeling of uncertainty that has grown throughout the process. From a financial point of view, Brexit could potentially lead to higher expenses: the C-Suite might have to fly to Paris or Frankfurt at short notice, say.
Finance leaders should act now to make sure that they can keep track. By investing upfront in a centralised system that allows you to see dynamic and customisable data on expense reports, you’ll be in a better position to assess whether expenses have increased. Make sure that you are in the 2.2% of finance leaders who AccountingWEB found prioritised strategic thinking: plan ahead, and think long-term.
Whether Brexit happens in April or is pushed back again to May, it’s definitely wise to keep your finances in order and prepare for the worst case scenario. From ensuring that your supply chain has a safety net of cash behind it, to being ready for a potential surge in staff turnover, there are lots of ways to get those finances ship-shape ahead of Brexit.