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The continuing uncertainty over Brexit may have significant financial and cash flow implications, particularly in the event of a No Deal Brexit but also as markets react to political events.

As such, it is important to continue to monitor preparedness in the flowing areas:

Brexit issue(s) Action required
UK Creditor and Debtor Management
  • Introduce strategies to ensure your continued ability to make and receive 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
  • If you consider a No Deal Brexit likely, consider whether deliveries can be shipped prior to 31 October 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 VAT and Customs arrangements (see VAT and Customs for further details).
Currency and FX Management
  • 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
  • Capital markets may experience shocks, particularly in the event of a No Deal Brexit.
  • If you consider a No Deal Brexit likely, ensure sufficient liquidity is in place including debt and revolving credit facilities in advance of 31 October 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
  • Consider key clients and their exposure to No Deal risks. Are credit terms and limits appropriate?
  • Proactively engage with customers to discuss.
  • Consider profitability and pricing of contracts in the UK and whether adjustments are required to avoid losses
Investments / Project Financial Close
  • 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.