Many Irish companies that deal in foreign currency are exposing their businesses to significant and unnecessary profitability risks due to a lack of consideration of appropriate hedging within their organisations.

 

That’s the message from the Association of Chartered Certified Accountants (ACCA) and Bank of Ireland who have launched a new programme to support businesses in developing hedging strategies to protect themselves against the considerable currency fluctuations in global markets.

 

Since the Brexit vote, the value of sterling has depreciated approximately 19% against the euro and is expected to remain volatile as political and economic uncertainties continue. According to Aidan Clifford, Technical Director at ACCA Ireland, Irish businesses are taking significant and unnecessary risks with fewer than 50% of businesses that are exposed to Brexit and who operate on a turnover of less than €10m, having any hedging strategy in place.

 

Commenting he said: ‘It is vital that in a time of such uncertainty businesses take the necessary steps to address their exposure to profit risks. Many of these businesses operate on a 2 or 3% margin on goods shipped to the UK but by the time they are paid, sterling could have moved as much as 7% and what was a profitable sale is now loss making.’

 

‘Our online resource aims at removing this risk by providing the skillset and expertise to protect profit margins for Irish businesses operating across global currencies. To support SMEs in their preparedness for future challenges and in recognition that the impact of Brexit is as much about sterling volatility as it is about tax and trade, the new resource covers the importance of currency risk management; how to assess currency exposure and how to develop a currency management strategy.

 

ACCA and Bank of Ireland’s initiative is designed to help Irish businesses exposed to trading within foreign currencies, by providing hedging strategies to safeguard against unexpected and undesirable fluctuations in their value.

 

Commenting, Seán Crowe from Bank of Ireland said: ‘The resource is a series of four short presentations that draws on Bank of Ireland and ACCA’s unique skillset in this environment to help Irish businesses to manage the risk of fluctuations in currency and better protect their profit margins.

 

‘Businesses should consider mitigating against risks to their bottom line due to currency movements. This facility is a valuable resource across a range of sectors and can be accessed through www.accaglobal.com/fx.’

 

 

 

 

Shane Finnegan, Aiken PR

Email: shane@aikenpr.com

Mobile: +44 (0)77 6453 4565

 

Helen Thompson

E: Helen.Thompson@accaglobal.com

T: +44 (0)20 7059 5759

M: +44 (0)7725 498 654 

Twitter @ACCANews

 

ACCA (the Association of Chartered Certified Accountants) is the global body for professional accountants, offering business-relevant, first-choice qualifications to people of application, ability and ambition around the world who seek a rewarding career in accountancy, finance and management.

 

ACCA supports its 219,000 members and 527,000 students (including affiliates) in 179 countries, helping them to develop successful careers in accounting and business, with the skills required by employers. ACCA works through a network of 110 offices and centres and 7,571 Approved Employers worldwide, and 328 approved learning providers who provide high standards of learning and development.

 

Through its public interest remit, ACCA promotes appropriate regulation of accounting and conducts relevant research to ensure accountancy continues to grow in reputation and influence.

 

ACCA has introduced major innovations to its flagship qualification to ensure its members and future members continue to be the most valued, up to date and sought-after accountancy professionals globally.

 

Founded in 1904, ACCA has consistently held unique core values: opportunity, diversity, innovation, integrity and accountability. More information is here: www.accaglobal.com