This month, the euro has been introduced in 11European Union countries.
The euro is not just another foreign currency but represents a real change to the business environment throughout Europe.
Some businesses will be more affected than others by the introduction of the euro this year.
Exporters and importers: UK exporters and importers will need to be ready to deal in the euro. Even if your company is used to quoting in sterling, you may be under pressure to quote in euro for customers in the euro zone and pay your suppliers from the euro zone in euros.
Multinationals: Some multinationals with a presence in Europe will most probably operate with the euro to simplify their accounts and finances. This will, of course affect, their UK suppliers as they will require invoicing in euros even from UK to UK business.
UK firms in supply chains: UK companies supplying multinational firms will most probably have been asked to deal in euros and will, therefore, need to adapt in order to retain the supply contract.
Retail banking: The UK banks will be ready to make payments in euros and, therefore, you will be able to open an account in euros. This will help your company to adapt to European business more easily.
Retailers: The high retailers should not be immediately affected by the introduction of the euro. However, retailers in tourist areas may be confronted by customers wanting to pay and be invoiced in euros. However, even these retailers should not expect a great deal of euro business until the introduction of euro cash in 2002.
Wholesale financial markets: Financial markets will already be using the euro.
Subsidiaries: Subsidiaries of parent companies based in the euro zone may find that the group's accounts will change into euros.
Here is a checklist of things to consider since the introduction of the euro on January 1:
l Ensure survival: Contact your customers and suppliers and ask if they will require you to invoice/pay them in euros. Do not ignore the euro because you are not trading in the euro zone.
l Budget for the change: Costs of communication with your customers/suppliers, amending/redesigning the price lists, catalogues, invoices, IT software, amendment of the size or weight of the products to match the new euro price and finally staff training should all be included.
l Contracts: Existing contracts may need to be re-written to incorporate prices in euro and new contracts will need to consider to currency of business.
l Preparation of euro accounts: If your company is part of a group based in the euro zone, you will have to adjust the accounts to euro.
l Funding and investments: If most of your business is in the euro zone, you may want to consider borrowing in euros.
l Pensions: If your company provides a pension scheme to its employees, make sure that the fund managers have implemented a strategy to cover the possible effect of the euro on the economy.
l Taxation: You will already be able to pay taxes and submit invoices in euros for imported goods for your customs declarations.
Francoise Joyce is an export adviser at Business Link Bradford & District
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