Preparing your ERP system for Brexit: tips and tricks

Oct 22, 2020
  • IT
  • finance
  • Microsoft
  • SAP

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.

Hot topic: the protocol on Northern Ireland

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.

A hard Brexit – soft on your ERP system

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.

A softer Brexit – harder on 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.

  • Prepare your documents for Brexit with ease with business document management:
    included in the Electronic Reporting framework, business document management enables business users to edit document templates in accordance with the legal requirements of various countries, without the need to write code. 
  • Predict whether your future cashflow is ready for financial impact, such as import duties, with the cash flow forecasting tools: this series of tools helps you analyze upcoming cash flow and currency requirement, so that you can estimate the expected cash impact of each transaction. 
  • Comply with UK customs formalities: SAP Global Trade Services helps you set up the right tariff code structures and manage export and import procedures (documents, licenses) and enables automatic communication with customs authorities or your broker.
  • Manage, file and submit your taxes more easily with SAP S/4HANA for advanced compliance reporting: this new reporting tool ensures compliance and simplifies tax submission, especially for companies that do business in many different countries with varying tax requirements.

Need help? Ask delaware

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!