How can Irish businesses boost their cash flow post-Brexit
Since the UK’s 2016 vote to leave the European Union, uncertainty has been about the only thing that has remained certain, not least around the falling pound, single markets and trade deals. Although of course the Republic of Ireland will remain an EU member, the departure of its British counterparts will still have an effect on southern Irish business and trade. Indeed, with all this going on in the background it’s not hard to see why businesses look to the future with caution. However, the good news is there is still plenty that can be done to weather the storm and focus on the key matter at hand - cash flow.
The importance of cash flow
In transitional times a resilient cash flow can contribute greatly to peace of mind - after all, it’s money that keeps a business operating. Whilst popular products and positive revenue may seem great, they’re not much good if customers are behind on their payments. Cash (flow) is king.
Although many Irish businesses can carry on trading whilst making a loss, it’s not a situation they can stay in long term. Late payments to their own creditors can, in the long run, add up to cash flow problems that can kill a business pretty quickly. However, getting cash flow right brings with it a level of certainty. It unlocks working capital and helps to give the business the best chance of surviving any potential turmoil.
To help boost the cash flow in your business, we’ve put together a few ideas:
Flexibility means recognising a problem and addressing it quickly. Strong reporting capabilities and analysing findings can help businesses to identify challenges sooner. This allows time for an adjustment process, where new investments or updates to policies can be carried out.
Work out a plan
Having a very definite direction for your business is also vital, whether your company is large or small, public or private.
A good plan should fit with the business’ current and future needs, be specific and realistic, and define exactly who is going to be responsible for implementing it. Additionally, a plan should be motivational to staff and include a strategy for completing regular analysis so any adjustments to procedures can be made.
Strong communication, both internal and external, is a mainstay for a successfully functioning business regardless of Brexit. Make sure the mechanics and systems of your business allow a good flow of information and build excellent transparency. This means no one can say they weren’t told about something, and any issues can be resolved quickly.
Ultimately Brexit will bring changes in laws and guidance, not least between the Republic of Ireland and the rest of the UK. Keeping your employees, clients and suppliers up to date through good communication will becoming increasingly important.
Have the right tools at your disposal
For the teams involved in managing a business’ credit, good quality, high-functioning software can make a massive difference in how quickly payments are received.
Software should automate and streamline a process and get rid of anything ‘clunky’. They should also offer full audit trails to make everything more efficient and intelligent. Credit managers should take advantage of powerful analysis tools, with the insight they provide being used to create easy to use, simplified accounts.
Whilst you’re looking at payments in and out, don’t forget to make sure your business is claiming all the extra governmental help you’re entitled to, like R&D tax credits and R&D grants. Launched in the year 2000 and managed by Revenue, R&D tax credits mean companies can get tax relief on research and development activities. R&D grants are also available for the same purpose although they are a lump sum that’s unrelated to tax.
What about exports and imports post-Brexit?
Again, this is still being negotiated. Currently, every business in the Republic of Ireland that imports, exports or moves their products and materials either into or through the UK must register with Revenue in order to receive a customs number (EORI number). This applies regardless of the value or amount of trade undertaken. It remains to be seen in what form this will continue. Irish businesses should assess their supply chain to work out how any changes might affect them and put contingency plans in place to aid cash flow management. This could include instances where a business relies on products it buys from Britain via a distributor.
Have a look to see whether your business is reliant on services or products that are certified to conform with certain EU regulations and UK standards. These licences or certificates may not remain valid if the UK leaves in October 2019 with no deal so it’s up to your business to take the required steps to make sure EU standards and regulations continue to be adhered to. Moreover, businesses should monitor any alterations that the UK government makes to their regulatory requirements over time.
It’s well worth businesses engaging with any trade representative bodies that they are a member of as they can help with a range of Brexit preparations. Irish businesses are also able to access free customs training through InterTradeIreland, Enterprise Ireland and the Local Enterprise Offices which will expand their understanding of the essential customs concepts, processes and documentation essential to success post-Brexit.
The Irish backstop?
The “Irish backstop” is in effect an insurance policy that’s designed to ensure that the border between Northern Ireland and the Republic stays open as it is now, whatever the relationship between the UK and the EU. Essentially, the UK would remain in very close alignment to EU customs rules, with some regulatory variations between Northern Ireland and the rest of Britain.
The UK and EU have both communicated a wish for the backstop never to be used, and have said they will aim to negotiate a future relationship where the backstop will not be necessary before the end of 2020 when it is planned to come into effect.
What are the benefits of using the Tax Cloud portal?
We understand that accountants and businesses are busy, and trying to work your way through the process of R&D tax credits can be a real headache. Tax Cloud is an online R&D Tax Credits portal that provides great value and expert guidance to steer companies through the process. Quick and easy to use, it will save you time and money whilst giving businesses the very best chance of being maximising thier claim.
On the Tax Cloud website home page, if you scroll down, you’ll find our R&D tax credits calculator offering you a highly accurate estimate of the corporation tax savings your business can make as well as the fee associated with usng Tax Cloud to maximise your claim and ensure you don't lave money on the table.
Call us today on +353 1 566 2001 or use our contact page and we’ll be pleased to answer any questions you may have about R&D tax credits including whether you are eleigible and if you're claiming your full entitlement.
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