Depending on the experience your company has with doing business internationally, preparing for the impacts of Brexit will either be unknown territory or business as usual. In any case, there are a few things to ponder as we get closer to the Brexit deadline.
Your supply chain will change
Regardless of the outcome of Brexit negotiations, you can expect a significant impact on your logistical supply chain. Many businesses carefully selected the locations of their warehouses based on their customers’ service strategies, but can you keep up with your lead times when Brexit is a fact? If not, what do you need to be successful? Additional warehouses? Alternative routes? What about your service level? Some companies are increasing their inventory levels in preparation for Brexit, but at what cost?
The secret is all in the preparation. Start right now by analyzing your inbound and outbound flows, and don’t omit processes beyond the EU and the UK. If one of the two is used as a hub, impacts on your business can be much higher than you anticipate.
Your finances will change
Brexit will have consequences on the financial side – in terms of tax codes, for example. Will you need more of them? Are there any extra costs involved? What is the predicted investment cost of the business transformation, and how will it affect your cashflow? Do you need to revise your stock valuation prices? How will heavy fluctuations in exchange rates affect your bottom line?
Customs procedures will change
To begin estimating the impact of Brexit on your trade activities, consider the following questions. If your customs formalities are already handled in house, do you want to continue with these processes even in the face of more required documentation, or search for a third party that can take over for you? Do your products require specific certifications or customs handling procedures? Are your products properly classified, and what does this mean in terms of duty costs? What about legal controls and reporting requirements such as Intrastat, VAT and others?
It’s clear that some customs formalities will be required for trade with the UK. For deliveries, there is more to declaration than showing an invoice. According to the predictions of the General Administration of Customs and Excise (AAD&A), the number of export declarations will increase 47% after Brexit.
However, the story is more complex, and much is still unclear. Despite the uncertainty, the following requirements are expected:
Get in touch with your business partners
Are your business partners preparing for Brexit? In other words: are they compliant? Can they provide you with necessary information and certificates in the formats you need? What about the delivery terms you negotiated with them; who bears the extra duty and transport costs that might arise?
To adequately prepare, review your existing orders and agreements. If your business environment is highly regulated, begin collecting your paperwork now, as additional controls and questions are sure to come your way. It’s also good to check if you have business partners in Ireland or Northern Ireland and review your options together.