How and why to prepare for Brexit NOW
Three in four UK firms unprepared for Brexit.
20 ways O2C can be change leaders
Is the potential impact of Brexit underestimated?
ACCEE has been forecasting a perfect storm of economic disruption for almost 2 years. There is every possibility a minimum of 3 events will hit in a very short period of time:
• Rising cost of borrowing
It will impact every one of you connected to Collections especially UK Collections.
It is at least 75% likely that your business managers are those that haven’t made any preparations and do not assume that they know any more than you. The last time the UK was subject to import taxation on a vast scale was almost 30 years ago prior to the single trading zone.
Between 1990 and 1996 I spent 4 years as Collector and Manager for the TNT Duty / Vat Department. Our responsibility was to recover the import taxes paid at the point of entry from the importer. It was during these years I really learnt my trade , working at high speed in an unforgiving but incredibly exciting business.
It is completely wrong to say that nothing can be done prior to January 2021.
Any errors, lack of training, awareness, communication will rebound directly into the Trade Receivables as disputes.
To follow are 20 questions you can ask your managers as preparation:
1. Which products are shipped from the EU to the UK? A very high percentage of automotive and pharmaceutical products are shipped daily for Just In Time manufacturing.
2. What will the Duty / Vat tariffs be assuming WTO Trade rates?
3. Who is your logistics partner / freight forwarder e.g. TNT, DHL etc?
4. Will your logistics partner / freight forwarder pay the import taxes on your behalf?
5. If so, how will they recover the import taxes – from you or the importer?
6. What will be the administration fee from the logistics partner / freight forwarder?
7. Who is preparing the product description at the exporters end?
8. What Incoterms apply? (See ACCEE Foundation Module 11 https://www.creditcee.eu/e-learning-2020/
9. What is the process for recovering incorrect import tax calculations?
10. Do you have General Ledger Account codes set up?
11. What amendments need to be made to the receivables system to accommodate the taxes and administration fees?
12. What fields in your ERP will be activated to accommodate the taxes and administration fees?
13. What amendments need to be made to the billing system to accommodate the taxes and administration fees?
14. How will your Credit Policy / Dunning Policy be amended?
15. Will you need to employ or redeploy personnel?
16. Are contracts prepared for personnel?
17. Is your reporting adequate
18. Have you met with the logistics partners?
19. Where will consignment notes, POD’s and other transport related documents be stored?
20. Are Terms and Conditions aligned for post Brexit?
The above 20 questions are for O2C and your business managers to start with as an urgent priority. These initial investigations will yield many more areas to review.
All the points above apply to your company, your suppliers and your customers.
Potentially you will be dealing with thousands of products with thousands of different duty codes.
It won’t be the high-level concept that will cause the problems, it will be the smallest details. All of the above will need a deep understanding and time to implement.
In return for this advice, please purchase the ACCEE Foundation Digital Learning series for each member of the O2C team or Module 11 as a minimum.
The Association can provide basic training, digital learning, coaching , mentoring and consulting in-house or online at short notice.
We look forward to hearing from you email@example.com.