Brexit’s Impact on Currency
Exchange rate changes can have a big impact on trading performances, particularly if an SME is sourcing goods from Europe or the US and paying for them in Euros or US dollars.
This volatility can lead to significant cashflow pressures where there are long lead times between the date of contracting for the supply or purchase of goods and the timing of the cash settlement.
Actions
- Assess business risks linked to exchange rate volatility
- Consider aligning trading currencies
- Aim to match currency transactions between customers and suppliers to avoid large foreign currency balances accumulating
- Consider using an FX agent or hedging to further mitigate the risk of volatility.