The following article explores the knock on effect the Brexit is having on Exchange Rates and what businesses should consider to keep on top of business performance.
The EU referendum result on the 23rd June favouring Brexit has resulted in economic instability in particular against the EURO and Dollar Exchange Rates. With currency rates dropping from the Pre-Brexit $1.5 to the £1 through to a new low since 1985 of 1.28 and the Pound Sterling against the EURO fluctuating. Companies that are conducting business internationally could cost themselves significant amounts of money without keeping on top of the latest exchange rates.
Picture the scene now, you have 10, 20 ,50 Purchase Orders out, a significant change in the exchange rate could seriously cut into margins and even take away profit from a business trade.
An intuitive international accounting software such as Sage 300 includes a multi-currency manager which enables organisations to update latest exchange rates on an hourly, daily or self-defined basis. This enables businesses to forecast with business intelligence how much of a hit the company could take with an adjustment in the exchange rate.
In forecasting the business can place itself in the best possible position to keep on top of business deals and not be caught short.
While implementing Sage 300 might involve some time and upfront investment, the small hit now could make the difference between the businesses profit margins with the ever shifting pattern in the exchange rates due to uncertainty.
If you are sitting on the fence about implementing a new accounting software, it is important to weigh up the risks of holding off, versus the benefits of putting in place a new system that can help your business performance over the current climate.
At Oakley we are always happy to talk to businesses and help answer any questions we can regarding accounting software. Feel free to get in touch by filling out our contact form or calling us on +44 01268 724005.