Euro Day: Trials and tribulations (2)

The importance of early preparations for euro changeover cannot be over-emphasised if there is to be a net gain from the euro changeover for business.

The Malta Chamber of Commerce and Enterprise (MCCE) is full of praise of the NECC's stance to ensure that minimum expenditure would be involved for business in terms of the changeover but still certain adaptation is of course necessary. The first step for any business is to make itself aware of its overall commitments and budget appropriately to ensure there are adequate financial resources to cover all necessary preparations.

Business needs to ensure that all its human resources are adequately trained and informed. While it is often advised that larger companies appoint a responsible person to oversee all euro changeover assignments, it is equally desirable for such an officer to ensure his/her colleagues are fully aware of the changes that euro adoption will entail in their day-to-day jobs.

Possibly the biggest task for most businesses would be to make the necessary preparations in terms of IT systems, software, equipment and websites. Virtually each and every business is dependent on ICT for its accounting system, tax returns and payroll. Given the major sensitivity, significant lead time is most advisable due to any complications that could arise. Once we are convinced that the IT sector is well aware of what changes are required and necessary, it is up to every individual business to liaise with its IT and software supplier to plan the implementation of the change and facilitate the operation by making available all the necessary information and resources.

Businesses must convert their price lists, rate cards, etc. This must be done early because of any new stationery, such as brochures and catalogues, that need to be prepared in time - whether in print or electronic format.

There are other issues such as the conversion of share capital and historical data. The issue of share capital will be more or less automatically resolved by virtue of guideline seven but a business must analyse whether this automatic adjustment is suitable to its needs. Business people must certainly think ahead in terms of converting historical data relevant to their accounts, payroll, turnover data and the like. A decision must be taken as to how many years it needs to go back and then implement such decision with the help of its IT and accounts specialists.

All businesses need to ensure they are prepared for compliance with the guidelines about the dual display of prices because this deadline is six months prior to euro day itself. In order to ensure that businesses would not suffer unnecessary costs and complications, the chamber has insisted that dual display of prices would not be rendered compulsory until the central parity rate between the euro and lira is rendered irrevocable by the Ecofin Council sometime between next June and July.

The timing for compulsory dual pricing is also needed to coincide with an agreement with commercial banks for a charge-free conversion between the two currencies. The chamber is encouraged by a number of positive signals. In fact, the costs of euro changeover already feature in the budgetary projections of a large number of firms. Besides, some retail outlets have introduced dual pricing display on a voluntary basis.

Besides the physical changes and preparations, the business community needs a drastic change in mentality. The mammoth step which the country is about to make must not be under-estimated. We are continuously reminded that euro adoption brings price transparency.

But this is a double-edged sword and not an automatic benefit. It needs to be turned into an advantage with good foresight, preparation and management. Business must account for this significant change in its working environment and alter its strategies accordingly in terms of its sourcing of inputs and marketing of goods and/or services. Relations with suppliers and customers must, therefore, not be underestimated and given due consideration.

I appeal to businesses not to lag behind in their preparations; and to contact either the NECC or the chamber for any assistance they may require. It is imperative that euro day finds us ready and prepared.

Concluded

Mr Borg is director general of the Malta Chamber of Commerce and Enterprise.