Deal or no-deal: steps businesses can take to plan for either outcome as the end of the Brexit transition process nears
- Published: Wednesday, 16 December 2020 09:47
As another deadline passes in the Brexit transition process, impacted businesses still have no concrete idea of what outcome to prepare for. However, this does not mean than no continuity and resilience planning can take place. In this checklist, Steve Hodgson offers some practical pointers…
This checklist provides a list of recommendations for building a plan and preparing your organizations for the end of the Brexit transition period on 1st January 2021.
It is aimed at provoking thinking across a range of areas of your business enabling you to use the time left before the end of the year to create a useful plan and to ensure that your organization is as prepared as it is possible to be.
Section one: Revisit previous plans
Many Brexit plans were written prior to the current pandemic and subsequent forced changes to the organization may have made elements of your previous plans out of date. Overview your previous Brexit plans and consider:
- Any changes in assumptions between the time the plan was written and now. Think about:
- Business model assumption changes
- Have your customers and the interactions with customers changed?
- Do you have new channels of delivery ( For example has the pandemic resulted in a move from physical to virtual delivery) ?
- Has there been any changes to your business continuity capability?
- Are there any new risks that have been introduced?
- Has there been any reshaping of the impact on the business of existing risks?
- What impact has COVID-19 had?
- Review previous plans in light of COVID-19 changes and impact
- Have any key personnel changes occurred?
Section two: People and staff
One of the key areas of change will be in the area of free movement of people between the UK and the EU and impacts to consider here include:
- Impacts on and status of EU workers in UK organizations and UK workers in EU organizations
- Has settled or pre-settled status been obtained by relevant members of staff?
- How exposed is your organization to skills shortages? In what areas?
- Travel – how will this be impacted?
- Health and wellbeing – the European Health Insurance Card may no longer apply to UK citizens. What are the implications of this?
- Consider your mobility processes and policies / assignments regimes.
Section three: Cross border trade
- What registrations will you need to continue to trade? (An EORI (Economic Operators Registration and Identification number) for example).
- What government support services can you make use of?
- Ensure registration has been completed for any import/export simplification schemes and systems
- Consider and understand duty relief schemes
- What tariff payments may be required in different situations?
- Consider stock management implications.
- Contract terms – are there any impacts, risks, changes?
- Customs – do you understand changes in this area?
Section four: Data.
Areas to assess here include:
- Data movement / GDPR etc.
- Do you need new or updated Standard Contractual Clauses ( SCCs )?
- Have you reviewed any guidance from your data regulator?
Section five: Finance, compliance, and regulatory considerations
- Are contingency / set aside funds sufficient? Have requirements in this area been changed due to the pandemic?
- Do you have access to finance if required to protect cash flow?
- Are you fully aware of sector rules and regulations post Brexit? What information gaps are there? How will rules differ under a potential trade deal or under WTO conditions?
- What is the status of spend management readiness? Are there actions needed in the area of discretionary spend management?
- Is foreign exchange hedging possible?
- Are changes needed in your debt management policies?
- Are any impacts on long term investments and financial arrangements likely?
- What, if any, impact have you seen to Short, Medium and Long term investments?
- Has there been change in reserves?
- If relevant to your business, how has the market fluctuation had an impact? (Potentially in both directions – positive and negative)
- Currency fluctuation issues: do contract clauses that include currency or pricing mechanisms need reviewing?
- Have there been any liquidity issues created through the pandemic which might be exacerbated? What plans do you have to manage this?
Section six: Supply chain
The potential for difficulties in the supply chain has been well sign-posted. Areas to consider in this area include:
- Stock management: is there a need for stockpiling in advance of 1st January? Will stockpiling need to continue after this date?
- Order times and lead times: how may these change and what will the impacts of this be?
- Consignment logistics.
- Production contingencies.
- Can specialist suppliers be easily replaced if they can no longer meet contractual requirements?
- Can you dual source / multi source suppliers or is there a potential to insource?
- Is it necessary to adjust just-in-time (JIT) processes ? Consider impact to materials, transportation, and logistics.
- Contracts for delivery times – what are the impacts if the supply chain is disrupted?
- Are contract rewrites needed?
- What tests are you putting place to assure the resilience of suppliers post COVID-19 and Brexit? How well matched are their business continuity plans?
- What are the VAT impacts on goods being traded?
- Do you expect any changes to grants and incentives ( both upside and downside ).
Section seven: business continuity and operational resilience
This whole checklist relates to business continuity and operational resilience in various ways but there are also specific actions which you should take:
- Contingency plans need to be updated and in place, including changes driven by COVID -19.
- Where possible test your Brexit plans.
- Is your Brexit crisis management board ready to run?
- Consider the implications of Brexit impacts on top of COVID-19 – how will plans need to change for different phases of the pandemic?
- Consider plans to take advantage of opportunities created in the market – first mover etc.
- Analyse existing contracts (for sure supply chain, but also outsourcing, supply of goods, materials & services. Support & maintenance contracts).