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Have you adjusted your accounts procedures for Brexit?

Barely a day goes by without some Brexit-related story hitting the headlines. It is very much in the news, and with good reason. Regardless of whether you are a large Chester-based business, or a small Bebington firm, the process of the UK leaving the European Union is going to affect your company. In fact, the chances are this upcoming change is already having an impact.

For example, if you import most of the raw materials you use, the weakening of the pound would mean that your production costs have gone up. On the other hand, if you buy your raw materials in the UK and export your goods, you will no doubt have benefited from the fact that your prices are now more competitive.

Without a doubt, these are interesting times for UK firms. Company owners need to take note of what is happening, and be ready to adapt as the situation unfolds.

Understanding your business is essential

The only way to be able to do this effectively is to know your business inside out. Understanding your company’s strengths and weaknesses enables you to see trouble coming, and respond accordingly. It also makes it easier for you to see the opportunities that drastic changes like this normally create, and work out how to take advantage of them.

Making sure your accounts are up to date

Keeping accurate accounts makes it far easier for you to keep on top of matters. In these turbulent times, understanding the financial health of your business both now, and in the near future, is more important than ever. If you have not reviewed your accounting procedures to make sure they are robust, easy to follow, and are actually being adhered to, now would be a good time to do so.

That way, should the pound drop (or rise) by several percent points again, you can immediately pull off cash flow reports to see what affect this change is likely to have. Armed with this information you can decide whether you need to raise your prices, or change your raw material supplier, rather than run for several weeks at a loss.

Run more profit and loss reports

The fluctuating exchange rate, the fact that fuel costs are also on the rise, and changes in consumer confidence all mean you need to keep a closer eye than normal on what is happening. It is therefore wise to run off your profit and loss reports on a more regular basis. Only firms in Chester that have 100% up-to-date accounts can do this effectively.

Use your accounts to model different scenarios

Chester and Bebington had slightly differing EU referendum outcomes, with Wirral narrowly voting to remain and the leave vote shading it in Cheshire West and Chester.

However you voted, if you think you see trouble coming, you can use your account data to model what may happen, which will help to reveal the solution. You can do the same to work out what you need to do to take advantage of any opportunities. This applies equally to a Chester manufacturer who is considering exporting for the first time, or a Bebington-based company that want to enter new markets.

Posted by Peter
October 28, 2016

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