Nearly half of SMEs scared of currency markets
Griffin Stone Moscrop & Co, based in central London, is warning that the growth and profitability of internationally-trading SMEs could be affected by volatile exchange rates.
Citing research by foreign exchange service providers World First, Griffin Stone Moscrop & Co explains that the nationwide survey of more than 1,000 senior decision makers at UK-based SMEs that make cross-border payments, found that although 83 per cent of SMEs operating in the manufacturing industry fear that currency volatility from the EU referendum will impact their business, 35 per cent are failing to take any notice of foreign exchange markets. Furthermore, 37 per cent do not see the importance of having a currency strategy.
The research also revealed the extent to which manufacturing SMEs remain exposed to currency fluctuations, with 47 per cent admitting they have been caught out by a sudden movement in exchange rates and one fifth having been severely impacted by market volatility.
Jenny Tolmie, Partner at Griffin Stone Moscrop & Co said: “The findings demonstrate a lack of appreciation on how important the exchange rate is and how its movements impact business. Of those surveyed, 43 per cent admitted that they did not fully understand and 49 per cent said that that currency markets ‘scare’ them.
“Having a proper currency strategy in place could improve profitability for SMEs because failing to manage exposure to fluctuations will always impact the bottom line.”
Jenny added: “While there is a lack of clarity about the exact timings of the EU referendum, SMEs should take the initiative to help mitigate the risks of currency volatility by seeking professional advice.”
To find out how Griffin Stone Moscrop & Co can benefit SMEs involved in international trading, please contact Jenny Tolmie on 020 7935 3793 or via email jtolmie@gsmaccountants.co.uk
The author is a partner in Griffin Stone Moscrop & Co, a member of UK200Group which has offices throughout the UK and Associates overseas.