Brexit - Transaction & cash flow impact - KPMG Ireland
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Planning for a possible No-Deal Brexit

Transaction & cash flow impact

Transaction & cash flow impact

"No Deal" issues & actions required now

UK Creditor and Debtor Management

Action required now

Introduce strategies to ensure your continued ability to make payments.  Proactively follow up with UK based creditors and debtors and agree priorities. 

Consider location of bank accounts and forecast anticipated receipts and payments.
 

Inventory and Order Management

Action required now

Consider whether deliveries can be shipped prior to 29 March 2019 and whether key raw materials can be stored to avoid transport uncertainties.

Consider additional administration requirements and resources that may be required to deal with new border arrangements (see VAT and Customs for further details)

Currency and FX Management

Action required now

Consider Sterling exposure and mismatches between assets and liabilities.

Are contracts being structured in Sterling? Can these be hedged? Are debt and liabilities appropriately hedged?

Consider profitability of sterling based contracts and whether currency clauses need to be inserted
 

Treasury, Financing and Forecasting

Action required now

Capital markets may experience shocks.

Ensure sufficient liquidity is in place including debt and revolving credit facilities in advance of 29 March 2019 to withstand potential shocks.

Review covenant calculations and headroom to pre-empt breaches as a result of earnings and FX weakness and engage with lenders.

Review cashflow forecasts and consider currency assumptions and whether updating is required.

Consider preparing various scenario analyses to factor in possible weakening of sterling in coming months.
 

Customer Management

Action required now

Consider key clients and their exposure to No Deal risks. Are credit terms and limits appropriate?

Proactively engage to discuss.

Consider profitability and pricing of contracts in the UK and whether adjustments are required to avoid losses
 

Investments / Project Financial Close

Action required now

Consider timing of key investments and projects. Where possible bring forward closing-dates for key financial and legal documents. Consider the most appropriate legal jurisdiction for all such documents.