Finance teams Brexit preparedness ‘alarming’

Survey shows half of finance leaders are still in the dark over Brexit             

Just 51 percent of finance leaders believe they are prepared for Brexit, according to a Financial Director survey. That’s despite the end of the transition period now only weeks away, as the UK and EU are yet to reach a trade agreement that will lay out the future trading relationship from January 1, 2021 onwards.

The survey found that just 10 percent felt “very well prepared” with 41 percent reporting they were “prepared”. 28 percent were “not very prepared” while five percent felt “totally unprepared”. Perhaps exemplifying the uncertainty around Brexit, 17 percent didn’t know either way.

The UK’s prime minister Boris Johnson had set October 15 as a deadline for a deal to be agreed with the EU, however negotiations have continued into November. Nick Ludlow, regional vice president at Chrome River believes the results of the survey reflect a worrying amount of uncertainty facing business right now.

“With Brexit now so close, it’s certainly alarming that barely half of all finance teams think that they are prepared for its impact. However, given that no-deal is looking ever more likely, it’s sadly not that surprising. What is also interesting is that one-in-six finance teams don’t know how prepared they are. Hopefully they won’t be in for a nasty surprise when January comes around and use the remaining time to review their processes and technology,” says Ludlow.

The director general of the Confederation of British Industry (CBI), Dame Carolyn Fairbairn told The Guardian in October that the UK economy was stuck in “suspended animation” while waiting for a Brexit deal, but she added that a deal would be “enormously better” than no deal. However, Johnson’s government has repeatedly refused to rule out a no-deal scenario, insisting that it is happy to leave on World Trade Organisation (WTO) terms.

Ludlow is concerned that 51 percent of finance leaders claim to be prepared for Brexit even though there is still no trade agreement in place – which could be a sign of a dangerous level of complacency among UK businesses and finance leaders.

“I think what we are seeing is  general apathy,” Ludlow says. “With coronavirus, people got caught and there was no fix for it, there was no set-up in place to handle the lockdown. But perhaps finance leaders are now thinking: ‘It will be okay, it’s not as bad as coronavirus.’

“Brexit has been on the back-burner. We’ve been fighting fires, spinning plates for our businesses because of coronavirus. The news is all coronavirus and Brexit is on page two, which is dangerous,” he adds.

Ludlow adds that perhaps the 51 percent of finance leaders are confident in their ability to handle Brexit regardless of how the final relationship looks because they’ve digitised their processes and are happy that their technology will support them.

“Cash visibility is going to be critical to companies’ survival, with such a huge amount of uncertainty in the near future. When you’ve digitised your financial processes and brought together your data sources, it’s far easier to visualise and analyse cash availability and spend patterns. This means that you can have a lot more confidence in your ability to weather the storm,” concluded Ludlow.