Interview with Kevin Vendel on how accountants can help SMEs re-invent themselves after Britain leaves the EU.
How are post-Brexit conditions likely to affect SMEs?
According to the Federation of Small Businesses, nine of out 10 exporting small businesses trade with the EU, and 21% trade exclusively within the single market. But post-Brexit, we can expect a shake-up of the business environment. Tariffs from the EU will increase prices, so there will be a shift to other markets, such as in Canada, South America and Asia. As business advisers, accountants will need to be educated about the regulations in these new markets. SMEs will need to pivot and find new opportunities, and they will require advice and funding to do so.
What steps should accountants advise their SME clients to take in the aftermath of Article 50 being activated?
Now is the time for accounts to help guide their SME clients in thinking about the risks and opportunities associated with Brexit. No one knows exactly what will happen–I was speaking to a member of the government’s international trade department, and he made it clear that uncertainty is something that we all need to learn to live with. This makes it all the more important to map out possible scenarios and have a baseline plan. Accountants can help craft models that can be adjusted as the conditions and new frameworks for export and taxes unfold.
How can accountants actively help their clients to future-proof against the effects of Brexit?
According to PwC, just 24% of SMEs have the right level of management information to help them fully measure and predict the impact on their business. There’s a specific risk to importers and exporters, and specialist companies that need services or materials from the EU. Accountants must position themselves as business advisers to support British business through this period of uncertainty. Having information sooner rather than later is vital: now that Article 50 has been activated and negotiations started, accountants must keep clients informed about potential changes and how they might affect their business. The information flow will be massive and SMEs will need help navigating this.
Why will access to flexible finance be important to SMEs in the aftermath of Brexit?
No matter what happens, companies will always need funding to grow. Strategic capital investments will be a key part of SME success in the coming years, but they need to look at more stable options and take less risk. SME financing has grown in the last few years with government programmes, initiatives from banks and alternative lenders improving access, but many small companies are still unfamiliar with their options. Accountants can help inform and educate. There is going to be uncertainty in the market – prices will go up, and shares drop. But accountants can provide a degree of certainty by making educated predictions on the shape of the market post-Brexit.
Originally published on Economia on 20 April 2017.
Originally published April 20 2017 , updated February 25 2020