Tariff volatility is back in the spotlight, and for finance and accounting teams, the implications are profound. As Crowe LLP’s partner Kevin Stewart shared with hosts Boyd and Al on the latest podcast episode of Savvy Supplier Podcast, businesses must take proactive steps to manage the ripple effects of changing trade policy.
Why tariffs matter now
Tariffs combine operational headaches with accounting complexity. Recent analyses from PwC and Deloitte highlight that tariffs raise inventory and production costs, can trigger asset‑impairment assessments or onerous contract provisions, and complicate revenue recognition when cost pressures cannot be passed to customers.
Key areas of focus
According to Stewart and industry insight, accounting teams should prioritise these steps:
- Stick to your process and playbook: In times of uncertainty, relying on defined workflows keeps your team disciplined and aligned.
- Understand the impact on suppliers and customers: Shifting costs upstream or downstream can affect margins, delivery, and customer relationships.
- Evaluate contract terms and pricing implications: Are your contracts rigid? Do they allow passing through tariff‑driven cost changes? If not, margin compression can follow.
- Develop a plan of action to manage financial risks: Use scenario planning to anticipate tariff hikes or trade‑policy shifts and their effects on cost, inventory, cash flow and revenue.
- Consider variability in pricing and its effect on revenue: Tariffs may prompt price changes, contract modifications or slower sales—each with accounting implications. EY+1
- Build strong relationships with suppliers and customers: Open communication helps surface risks early and supports negotiation of flexible terms.
- Collaborate with legal and finance teams: Involve cross‑functional stakeholders early to monitor regulatory changes, renegotiate contracts, and adjust policies.
- Define a playbook for consistent decision‑making: Document triggers, escalation paths and review processes so every tariff or supply‑chain disruption is handled the same way.
- Engage in open communication with stakeholders: Investors, lenders, audit teams and internal stakeholders need timely insight into how tariffs affect cost structure, contracts and controls. Wolters Kluwer
Practical actions to implement now
- Update your internal controls over financial reporting (ICFR) to reflect tariff‑driven risks: classification of goods, country‑of‑origin tracking, valuation of imports.
- Review inventory costing and asset carrying amounts: tariffs increase acquisition cost, and in some cases trigger impairment analyses or require change in depreciation assumptions.
- Evaluate whether contract modifications (due to tariffs) must be accounted for prospectively or via catch‑up under revenue‑recognition rules.
- Run scenario modelling: what happens if tariffs rise 10 %? Supply chain delays double? Contract renegotiations fail? Map out cash‑flow impacts.
Conclusion
Tariff uncertainty isn’t just a supply‑chain issue—it’s a finance and accounting challenge.
As Kevin Stewart emphasises, the organisations that treat tariffs as strategic risk (not just another cost pressure) will be better positioned to protect margins, maintain compliance and preserve operational agility.
With the right playbook, accounting teams can turn volatility into opportunity rather than crisis.
