Releasing cash from working capital will directly impact your free cash flow and improve liquidity. Following the Brexit vote, you may wish to consider the challenges associated with cross border cash and working capital management.
EU laws limiting payment terms for trade across EU member states may no longer be relevant for trade with UK. It’s important you understand how this might impact supplier and customer relationships in a post-Brexit world. It’s also vital you make robust plans to ensure you retain access to suppliers and customers across Europe and the rest of the world - and understand how new trade agreements and trading relationships will likely impact working capital and liquidity. As the supply chain elongates and the complexity of cross border trading is added in, there’s a real risk that working capital and liquidity become stretched for those companies that are unprepared. There are a number of actions you can undertake to prepare – from optimising the financing of cross border trade to preparing for logistical challenges.
Identifying risks and sensitivities that could occur in Brexit scenarios is important for setting business strategies. Stress testing forecasts can establish the size and timing of any potential liquidity requirements or covenant breaches.
We can work with you to understand the quality and robustness of forecasts and improve visibility and information flows to support decision-making.
If your business starts to see a degree of financial strain or requires additional funding, we can take a lead role through what is likely to be an unfamiliar situation, working side by side with the business to:
Where there’s cause for concern around continuity of supply, we can work with you to understand the viability of ongoing business and any risks involved.
Head of Business Restructuring Services, PwC United Kingdom
Tel: +44 (0)7980 844528
