If you’ve travelled along any UK motorway recently, you may have seen the message “Freight to EU may change November 1. Check papers". As things currently stand, we are still in the EU and freight continues to flow across borders, but this is a taste of things to come when the UK leaves the EU.
For now, the EU has agreed that (for a transitional period) UK hauliers will be able to continue using their existing licences to and from the EU. However, the arrangements that currently exist between the UK and EU are likely to change.
Accoring to the Q3 2019 SME Confidence Tracker, 10% of SMEs are still investing in their exports, despite the political uncertainty from Brexit. This marks the second consecutive quarter of this number of SMEs investing in exports.
Currently, SMEs trading with the EU work within European-wide standards, a relatively simple set of regulations, including quality control and health and safety measures. It is likely that many of these rules and regulations will become more complex over the course of the transition period. SMEs should seek advice from the Government directly to find out what may change.
What SMEs can do to continue exporting to the EU
- Review your finances – You may not realise that you can release funding tied up in invoices to improve your cashflow position or provide the funding you need to invest. Export Finance is designed for SMEs who have customers overseas who may have extended payment terms or issues collecting payments from abroad. Continuing currency fluctuations may also affect your bottom line. So it’s worth exploring FX options to mitigate any potential impact on profit.
- Research your export markets – With Brexit expected to shake things up it is likely that your usual export markets may look a little different after the we have left the EU. The government offers a paid service to research export markets for you as well as extensive country guides. It may also be a good time to explore new markets outside of the EU.
- Your payments could change – SMEs will continue to be able to use the Single Euro Payments Area (SEPA) schemes to make credit transfers and direct debits in euros, however you could be charged more. SMEs would be advised to forecast these potential changes to see what affect they will have on margin.
- Start talking to your EU based customers – Remember that leaving the EU isn’t a one-way street. Demand for your goods may change after we leave the EU as B2B customers adjust their own supply chains.
- Check if you need sector expertise – SMEs operate in many different sectors with little quirks and nuances in the rules. Make sure you understand how you will be affected and seek out expert advice if you’re unsure.
Read the full Q3 2019 SME Confidence Tracker.