I’ve spent much of the last two years speaking to clients across the UK, covering a wide range of industries about the different potential scenarios surrounding Brexit and what businesses can be doing to prepare. In many of those conversations, a consistent theme has been that it’s “too soon”, or it’s “too uncertain”, to commit resources to Brexit preparations, even as the deadline comes ever closer. Many businesses have understandably been waiting for more certainty that those plans will really be necessary - which has been kept tantalisingly out of reach from one political milestone to the next.
Again with only 2 weeks to go, the vote to approve an extension - the length of which is dependent on another political milestone, and full agreement of which on yet another - leaves many businesses still waiting. We’re firmly of the view that all businesses should be implementing plans for no deal until there is a legally agreed alternative, which if it does come, may only come very late in the day. But if you haven’t started, is it too late to be worthwhile?
Regular listeners of our Beyond Brexit podcast series will know I love a ‘myth buster’. So here’s my latest Brexit myth buster. It’s not too late to act. Even for those businesses who have done very little already. I’ve tapped into my network of colleagues in all our technical disciplines across PwC to give you seven practical things to do to extend the resilience of your business to no deal disruption.
Set up your business continuity plans and team. With time short, a good starting point is rapidly heat-mapping your areas of risk to understand how disruption will impact you, and confirm the length of time you can sustain levels of disruption. For each area identified, agree who is responsible on day one for focusing on business continuity and how their jobs will be backfilled if needed. Also consider the governance for rapid decision making and allocation of resources if needed.
Proactively engage your suppliers, customers and other key organisations - everyone is in the same boat! Take time to ensure you understand the potential impacts on your stakeholders. Communicate your expectations of day one, confirm your working assumptions versus theirs, and build new information into your own heat-maps and business continuity plans.
Speak to your people. Brexit can be an unsettling topic. You may have already spoken to the non-UK EU nationals in your workforce about the Settlement Scheme, but you should be engaging with all of your employees about Brexit and your preparations. Through proactive communication you can listen to any concerns your people have, provide reassurance about the continuity plans you have in place, and equip your people - as the advocates and spokespeople for your organisation every day - to provide that reassurance to others.
Prepare your supply chain for customs checks. Look at all the shipments you have planned for April 2019, and confirm who is completing the “simplified frontier declarations” recently outlined by HMRC. Will it be you, the supplier, or a 3rd party logistics provider? Consider whether any shipments can be scheduled early. If not, then confirm that the data is available and accessible to whoever needs it to be able to complete the required declarations ahead of time, even if this requires a temporary manual process in the short term. Don’t forget to register for a UK Economic Operator Registration and Identification (EORI) number if you need one.
Identify all planned business travel from the UK to the other EU27 in April 2019. With the potential requirement for work permissions for some countries and some activities for travellers with UK passports, take the time now to find out who’s planning to travel and the planned activities on each trip. Be prepared to secure work permissions, change plans, reduce activities or change who travels if need be. Don’t forget to make sure all business travellers have compliant passports and international driving permits as required for travel.
Look at your working capital exposure. Consider the risk of delayed payments, resulting either from your customers extending their payment days or resulting from stock caught in transit. Make sure all receivables are invoiced promptly, and consider the options to extend your own payment days. Don’t assume flexibility in your overdraft facilities, or underestimate the importance of trade finance providers, during a period of disruption.
Speak to your bank. Make sure you have a good understanding of the Brexit transitions your bank is making and the implications for your dependency on borrowing or other financial products. Have you discussed your contractual arrangements with them and any legal entities which will require services in the UK and the EU? Do any of the changes need new legal contracts? Are there any data transfer issues? Don’t assume it is all in hand, but engage proactively to ensure continuity of the services you rely on. The same advice applies for insurance contracts and any asset management services you may use.
There’s plenty more guidance available on further steps you can take to prepare for ‘No Deal’, many of which are covered in our recent Brexit Readiness Scale, whether you feel not ready, or ready for anything.
If you’d like to discuss any of the issues raised in this piece in more detail, please feel free to contact me or a member of PwC’s wider Brexit team. Remember, it’s not too late.