The Euro

3. Dealing with the Euro

3.1 Focus on the needs of your customers.

• If your customers want to see prices quoted in euros, adjust your systems accordingly.
• Talk to businesses you deal with. Make sure you can cope with any changes they make to pricing, payments, or their electronic systems.

3.2 All new equipment and software should be compatible with the euro. Check before you make any new purchases that it works with the euro and do not buy anything that is not compatible.

3.3 Find out what your competitors are doing.

• You may not want to lead the field, but nor do you want to be left behind.

3.4 Review your sales and pricing policies regularly.

• Compare your prices with European and domestic competitors.
• If your prices are competitive in Europe, the euro opens up trading opportunities, especially if it is easy for consumers to see, compare and purchase your goods or services. For example, through your website.

3.5 Train employees to cope with the currency.

• If you are likely to receive cash in euros, do you and your employees know how to deal with them?
• Can you (and your employees) tell a genuine euro note from a counterfeit?The highest denomination euro note in circulation is the €500, worth about £335.
• Does everyone in your business understand the importance of avoiding confusion between the symbols € and £?
• Does everyone in your business know and understand the £ to € exchange rates. And can they calculate how much change to give someone if necessary?

3.6 Talk to your bank.

• Ask about the costs of setting up a euro account.
• Establish the costs of changing euros into sterling and vice versa, and how long it will take.
• Consider facilities for hedging your currency exposure, if it is likely to be significant.

3.7 Talk to your accountant to find out whether you need to amend your systems.

• The adjustments to your systems are potentially complex and expensive. It depends on what transactions you need to do.

3.8 Review your financing.

• Cross-border competition between euro banks is increasing, pushing borrowing costs down. Also, euro interest rates are generally lower than sterling interest rates.
• If you want a euro-denominated loan, your bank is likely to require that you have a healthy euro-denominated income.