How will Brexit affect Credit Management?
Current political events will go down in history as one of the most tumultuous political periods in this country’s history. I suspect future generations will look back incredulously on what has happened and on some of the decisions taken. But then, hindsight is always wonderful and adds perspectives that weren’t there at the time.
We elect politicians to govern our country and we’re entitled to expect them to approach the task in the interests both of their constituents and of the country. The more I hear and see currently, the less I’m convinced that that is the case, and it’s shocking and worrying. I’ve just finished reading ‘Why we get the wrong politicians’ by Isabel Hardman. It’s a fascinating read and also insightful as to why our political system often doesn’t achieve what it’s intended to.
I’m increasingly being asked what the credit profession believes the impact of Brexit will be, regardless of how events unfold. I’m pretty certain our profession has no better idea than anyone else at this time. Even Twitter can’t seem to find a consensus business view!
Negative impact on your business cashflow
What I do know is that good credit professionals are working with and within their businesses to ensure they can cope with whatever is thrown at them. The impact on product movements in and out of the country, from shortages of raw materials, and from changes in tariffs, could be significant. Production and invoice delays will affect cashflow. Currency fluctuations, cross-border collections and enforcement difficulties, and the weakening financial position of adversely affected customers will impact collection and recovery rates.
Good credit professionals by their very nature are adept at dealing with the uncertainties they face. My words then bear repetition: “While the world is in turmoil around us, we have to continue making good credit decisions, we have to find ways to do business that we need but might prefer not to have, we have to make sure cash keeps flowing to keep our businesses in business.”
That’s what we do.