With the coronavirus pandemic dominating the headlines, it’s easy to forget about other things happening in the world. Remember Brexit? In mid-October, EU leaders met in Brussels to discuss, among other topics, the upcoming Brexit. The discussions showed that many major obstacles remain in the way and time is ticking … With less than three months to go before the end of this transition period, it is key to prepare your business and ERP system for the Brexit impact – whether a trade deal is agreed upon or not. Check out our tips and tricks.
A no-deal Brexit is looming larger than ever, yet everyone is still hoping for a deal to be negotiated. Whatever the outcome, the UK will be a non-EU country on 1 January 2021 and this will bring about major changes in trade rules, your logistical supply chain, procurement processes and finances. Depending on the experience your company has with doing business outside of the EU, preparing for the impact of Brexit will either be unknown territory or business as usual. In either case, however, Brexit will require changes to your ERP system.
Relations between UK and EU started souring in September 2020, as the UK government rowed back on the ratified Northern Ireland protocol. Contained within the Withdrawal Agreement that the UK signed in January 2020, the protocol states that Northern Ireland would remain within the EU single market whilst staying within the UK’s customs territory. However, goods entering Northern Ireland from Britain would be subject to the EU’s customs code.
In September 2020, the UK government introduced the Internal Market Bill (IMB), which overrides parts of the deal with Northern Ireland – leading to less clarity and more uncertainty on post-Brexit trade relationships.
If the UK government and EU are unable to reach a negotiated deal, there will be big implications for every business that trades with the UK. Paradoxically, the impact on your ERP system will be fairly limited – provided you are used to doing business outside of EU. If the UK leaves the EU with a no-deal, trade will fall back on WTO rules and the UK will become a ‘third country’ from an EU perspective. This means that you will have to make this adjustment in your ERP system.
Every EU firm that trades with the UK keeps hoping for a Brexit deal. Yet, whatever the agreements that may be made, the UK will leave the EU – which implies that goods won’t move between the two regions as easily as they used to. The impact on your ERP system? Major changes and configurations will be needed. The good news: whether you’re using SAP or Microsoft 365, your ERP system is a toolbox full of possibilities, many of which often go unused. While challenging, Brexit is an opportunity to unveil these hidden features.
Although the ruleset that will be valid after the actual Brexit in January 2021 is still unknown today, we know the impact will be big. delaware can help you configure your ERP system to ensure that it is ready for the new situation. Looking for support or a specific IT solution related to trade processes? Get in touch with our team!