It’s just fourteen-days until Brexit and the predominant mood is one of confusion. Will something be agreed, or will the UK crash out of the EU with no deal? Whatever happens, one thing is certain; things will change. The good news is that there are practical steps you can take to manage this change.
There are nearly 25 million small and medium sized businesses (SMEs) across Europe – and they make up the heart of the economy, employing two-thirds of workers and contributing over 55% of economic value. Whilst the government is providing some general advice, many SMEs feel that they are not getting enough support. Back in the summer, the Institute of Directors - which represents smaller businesses in the UK - said that the government’s advice was “pretty impenetrable for the average small business”
At Revolut we are doing everything we can to help our customers prepare for and manage the changes that will come with Brexit. Key to our preparation has been the setup of a new European entity (called Revolut Payments UAB) so that our customers across both the EU and the UK will still be able to use all the great Revolut features they know and love. You can read more about what we are doing here.
There are also things you can do as an SME to help prepare yourself. Speaking with our customers we’ve heard how many are taking specific actions to stay agile and ready for whatever changes Brexit brings. Here are three sensible steps we’ve seen SMEs take.
💱 SMEs are looking at multi-account solutions for post-Brexit payments
By introducing multiple accounts in multiple currencies, small businesses can ensure that, whatever new barriers or regulations follow Brexit, they can pay staff and suppliers wherever they are across Europe without crippling bank fees or exchange costs. By using Virtual IBANs (International Bank Account Numbers) in each market, SMEs effectively have a local bank everywhere they need. They have the confidence in their ability to make and receive payments whatever the status of the UK financial institutions – but without the hassle, expense and complexity of establishing relationships with local banks in every market. Local staff and suppliers are paid locally, so no need for cross-border payments.
“Our staff are constantly on the move around the globe and need a secure, efficient and easy way to make payments in the respective currencies. It is imperative we have a banking solution which works in all territories. We use Revolut for Business for all international transactions, including paying international suppliers.” - Gavin Clark, CEO of Remote Solutions
📉 Prepare to manage volatility
Savvy firms are beginning to actively manage the risk of volatility in the currency markets. If the UK Pound were to crash on a no-deal Brexit, for example, many may find the value of any retained revenues or profits crashes along with it. Creating accounts in multiple currencies and holding some funds each spreads this risk. Keeping funds in local denominated currency accounts (we offer accounts in 28 global currencies) means reduced exchange rate risk buffering you against not only currency volatility, but increases in bank charges for foreign exchange.
“We store currency in Euros and US Dollars rather than normal banks who would exchange into UK Pounds. We prefer to keep some revenue in [these] other currencies in case the Pound tanks on the back of Brexit.” - Alexander Stewart, Founder of OneNine5
🤺 Laser-focus on costs
Finally, with lower growth a likely outcome, managing costs will become an even higher priority. Every penny and cent matters, but some spending is essential. Many SME customers are using Revolut’s ability to issue an unlimited number of physical and virtual corporate cards to give their staff the flexibility to spend when necessary, but with the control and visibility required to manage that closely.
“[We] track employee expenses on a single dashboard,” and, “With Revolut it’s easy for our accounts team to manage spending, have control over payments and ensure our finance is properly controlled at all times.” - Gavin Clark, CEO of Remote Solutions
Reduction in costs, better visibility of spending, less time on administration, and enhanced flexibility to respond to change are critical to SMEs at any time. Brexit just makes these more important than ever. Solutions exist with Revolut for Business, meaning you can take the steps you need to be as prepared for Brexit as possible.
Whatever happens on the 31st October, you can be sure that we’ll be there with the tools and expertise to help. In the meantime, please do get in touch and let us know how you are using Revolut to prepare for Brexit.