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Brexit dilemma: Businesses should make the most of extra time

Now that Britain’s new deadline for leaving the EU is set for 31 October, Theresa May will have to come up with a new trick-or-treat strategy to avoid a new nightmare ending.

Europe at deadlock over EC presidency

So far, UK and EU politicians are nowhere near reaching a resolution on Brexit. Initially, May was adamant her “Brexit means Brexit” slogan (which later morphed into “the best possible deal”) would suffice to win over opposition on both sides of the divide and her deal would make the cut.

Over 1,025 days later, she is still toying with an idea of a shorter extension to Brexit in an attempt to gain major alterations to her thrice-failed deal. However, it has become clear there is no escape from the upcoming European Parliament election on 23 May.

The UK prime minister may be more open to the idea of delaying Brexit, but for how long? And what would that mean to the EU and UK economies, which are already going through a rough patch as their economic outlooks dim?

Numbers do not lie

The latest research from Goldman Sachs revealed the UK’s so-far chaotic Brexit has cost the economy £600 million a week since the 2016 referendum.

In addition to leaving everyone with a sour taste, what has now been described as Brexit crisis has also left a substantial dent in investment and economic output as companies shifted their strategy to stockpiling.

The latest GDP figures came in stronger than markets anticipated at 0.2 per cent growth in February as opposed to the forecast of zero per cent growth. However, with the new deadline, business will start using the piled-up stock which could have a negative effect on the economy.

New countdown

Now the clocks have been reset and with 199 days to go until the new Brexit deadline, SMEs and large enterprises have an opportunity to take further steps to prepare for Brexit.

Think automation

From optimising financial assets and cash flows, to managing financial risks, the fast-growing Digital Treasury Ecosystem offers companies new efficiencies and tools to automate your daily treasury operations and to have more time to consider and execute critical business decisions.

Nowadays, intelligent technology platforms such as the Cloud, Blockchain and applications offered by FinTechs like Centtrip can individually or jointly complement traditional banking resources to save your business time and money. They offer enhanced real-time reporting features for better cash management, live rates, rate alerts and future contracts to mitigate risks associated with currency fluctuations. They can also utilise existing data to build efficient and user-friendly financial risk management processes.

Data is important, but what you do with it and how you treat it is even more important. The business that understands its cash movements and risk exposure can grow faster in an intelligent way.

Think Brexit-ready

If the worst-case scenario happens and Britain crashes out of the EU without a deal (something both sides reiterated they do not want to happen), liquidity could become a genuine concern.

If you or your business partners depend on having consistent access to European markets, how can you make sure your payments will be received and without delays? It is worth asking those awkward questions now when there is still time to make sure your business and your partners are Brexit-ready.

At Centtrip we already have a strategy and tools in place that will enable us to maintain our access to European markets, even in the worst-case scenario.

Think timing

Anticipating and preparing for unexpected changes or potential hurdles is the best strategy. Short term or long term, planning has never been more vital than now.

Take time to evaluate how your customers and suppliers could be affected by potential changes so you can prepare for potential impact.

From understanding your cash flow requirements, mitigating currency volatility and financial risks, to introducing digital treasury tools sooner rather than later could help eliminate the majority of the unknowns and remove your dependency on the future Brexit outcome.

Also, consider setting a realistic internal pricing rate for currency, so that if a shock move – similar to the one that happened after the 2016 referendum – occurs, you can weather the storm.

And last but not least, Centtrip is here to support you and your business through any eventualities.

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