SMALLER companies which trade occasionally in mainland Europe and Eire are being warned that they will have to pay their bills in euros from January 1 next year.

The Association of Chartered Certified Accountants is pointing out that whatever the outcome of any debates or the timing of a referendum, local currencies will cease to be legal tender in Euro Zone countries.

Chas Roy-Chowdhury, Head of Taxation at ACCA, said: "Many businesses which only occasionally trade with organisations in the Euro Zone may be under the illusion that they do not have to consider the Euro until a decision comes from any referendum which takes place in the UK.

"But, whatever their views are on the single currency, they must ensure they are ready to charge for -- and pay for -- work in euros."

He added: "They should also consider issues like contracting for work, which will involve costings in euros, so that potential customers can easily compare them against competitors from the Euro Zone on a like-for-like basis.

"Failure to be prepared could be very costly."

The 12 countries currently in the Euro Zone are: Austria, Belgium, Eire, Finland, France, Germany, Greece, Italy, Luxembourg, The Netherlands, Portugal and Spain.