The accountant's guide to Brexit
Brexit will beset practitioners with a series of new challenges – but are they ready? Philip Fisher urges all firms to implement a risk assessment strategy.
Like almost everybody else in the country, the vast majority of accountants have been sticking their heads into the sand on the basis that leaving Europe was a long way off.
It seems unlikely that even the biggest firms have any coherent processes in place, if only because nobody even at prime ministerial level knows how things are going to pan out over the next two months, let alone two years or two decades.
This is a highly unsatisfactory state of affairs for those of us who are prudent by nature.
While from a business perspective many of us might hope that if they wait long enough this will all go away, whatever the outcome of current negotiations in Parliament and with Europe, practitioners are going to be faced with a series of new challenges that they have will have to confront head-on.
However, uncertainty is the core of our problem. Is the next step going to be no deal, structured no deal, Norway plus, Canada, a general election, a delay, a second referendum, a discreet change of mind or some other variation on the theme?
At the moment of writing, we don’t know the answers but time is moving on and some strategies must be put into place in the very near future.
If, as seems increasingly likely, Britain decides to exit Europe without any kind of deal in place then there will be immediate consequences for many clients, which could have a dramatic impact on the practices acting for them.
There may also be legislative change overnight that could make a difference to our own processes, procedures and profitability.
In the longer term, whatever the outcome, unless Britain collectively changes its mind either by way of a referendum, general election or merely Parliamentary whim, we must expect that the British economy will suffer in the short-term since even those most actively advocating a dramatic exit accept this as inevitable.
While smaller practices with little or no international spread and workforces who are British born and bred may feel that for them this is only a storm in a teacup that is unlikely to be the case in the longer term.
But if nothing else, there will inevitably be changes in legislation as a direct result of the decision made in June 2016. In addition, the economy will take an initial hit and that is likely to lead to indirect consequences including attentional tax hikes, difficulties in retaining and recruiting members of staff and the risk of client losses.
For those of us with strong European ties, through international networks, client connections or staffing, there will almost certainly be a need for major re-engineering.
As this series is likely to repeat on a constant basis, going into times of change with your eyes open is a major part of operating successfully. If your competitors are taking no action, while you can be seen as a leader at the time of great insecurity, then this could be a chance to succeed while others are struggling if not actually going bust.
Therefore, to reiterate, please make sure that you are ahead of the game so you can make the most of what need not be a threat and could be a fantastic opportunity.
Over the next several weeks we will continue this guide with articles covering the difficulties of talking with clients without giving offence, general advice, and business issues including stock valuation. But up first we examine how accountants can prepare for the prospect of no deal.