Accounts Receivable and Economic Challenges: Reactions from Shared Services Functions – [FULL INTERVIEW]

0:02
So hi, everyone. I’m here with Michael Weir today from atradius traders in the credit assurance, but also in the outsourcing space with a presence all around the world, particularly around we’re going to chat a bit about the accounts receivable and collection space. And, Michael, you’re in charge of like global solutions for traders.

0:20
Yeah, I’m part of the Global Solutions team. And myself and my colleague, Armand tassels are here today.

0:25
Yeah. And this week, you’re at the shared servicing and outsourcing week. So yeah,

0:29
yeah. Shared Service. So w Astro, Portugal, otherwise known as I suppose the Grammys or the Oscars for the world of shared services.

0:39
How’s the show been going? What have you picked up? You’ve been there about two days now?

0:42
Yeah, we’ve been here since Sunday. Obviously, we calm and there’s there’s an element of camaraderie people putting their stands up. But then there’s a welcome sort of party for the people who are obviously going to be attending and the staff members visit. Yeah. So yeah, that’s a little bit looser shot. It’s not getting into the minutiae of order to cash. So that was supposed to be on Sunday, then, of course, Monday, people start registering delegates start arriving, workshops, start taking place, panel discussions, run tables, various other things, case studies. And ultimately, you have the basically, this is like the Oscars of shared services. We literally it is, obviously we’re all shared services, only one piece of our puzzle. But we’re here because we want to help come in at the back end of shared services, and help with accounts receivable. So to me, it’s been a massive education. I’m not an expert in shared services. But I’ve taken part from an HR perspective, and some of the some of the roundtables and I’ve spoken at some of the events,

1:41
some of the topics that seem to be on their talent seem like that as a big issue. Obviously, cash flow is a big issue, which is where you guys would play a big part of business transformation. And what are some of the things that you picked up as being challenges today that people have been talking about?

1:54
interesting challenges, I mean, I can only speak from the top the ones that I have had the time to attend. But things like trying to streamline trying to streamline processes, trying to create a situation where there’s an end goal, there’s more of a sort of not a whole bunch of lanes, but just one motorway to success for companies. Because obviously, you’ve got accounts payable, you’ve got customer service, you’ve got AR, you’ve got all sorts of there’s so many facets that go into shared services. So what I’ve learned from this is that people are wanting to make life much easier, but ultimately not get into a situation where they’re trying to like jail commercial right through to the payment, because at the end of the day, what the end goal is, obviously, to get the seals, that’s the top line. But the bottom line is really what matters. Obviously, we’re never an impulse pandemic times we’re living in economically difficult times, people really want to focus on the end goal, which of course, is the bottom line, and getting back on track.

2:49
And obviously, you’ve got offices all over and people from there are there from all over Europe as well. I mean, what’s the sense in terms of differences between the different markets, a lot of the same challenges the same everywhere? I mean, you know, I come from a UK perspective, but also you’ve got people from elsewhere in Europe, and any kind of differences or changes, are we pretty much all facing the same issues?

3:08
That’s a very incisive question. And obviously, I’m not qualified to answer, specifically, but what I would say there are certain areas in the world and obviously have more focused on others, obviously, big news at the moment, for example, is America and their debt ceiling. What’s going to happen? Is that going to be resolved, because obviously, if it’s not resolved, hopefully it will. But if it’s not the global economy will be tremendously impacted. You know, obviously, each region does have their own separate headaches. I don’t want to get into the politics of it. But obviously, you know, Ireland would be more stable than, for example, the UK, I find out today that the inflation has gone down for the first time in a long time. But there’s an answer to your question. Different countries have different issues. You know, there’s problems in southern America has people here from America and Northern America, I spoke to a couple of guys earlier on who are from Dallas, from Houston. And they said, they’ve got specific issues, which I’ve mentioned, and they’ve got their own problems. And the long and short of it is a lot of people don’t actually know what’s going to happen. If you just said to me, this is going to happen 234 years ago, if you just said to anybody, what has ultimately happened, they would have thought, wow, oh my gosh, it’s crazy. Life is a roller coaster type thing.

4:26
And what about closer to home in terms of cash flow, their accounts receivable, those sort of things? I mean, you’ve been chatting to delegates there around accounts receivable and cash flow and this kind of thing is that is how much of a challenge is that across across the different markets for the guys you’ve been talking about? Is that an upcoming issue in terms of people paying later suppliers paying later?

4:44
That’s a really interesting point, because DSO is always used to include him by myself. But I’ve noticed now i that commercial because people are driving for sales. It’s not so much DSL, it’s about the average day people will get paid now, what can you do if I can Marshall team is driving business. They’re extremely fussy for us in their driving for business. And they’re putting people on very flexible credit terms. finance teams can’t do that. So if you got a big deal, and you put them on 90 days, that’s going to impact your your numbers. But in answer to your question, what I would say is, I’ve noticed, it varies from market to market, for companies, a very commercially driven company, and they were under really just want to get sales on the board sales on the board, they tend to have more AR issues, because that’s their focus. But if companies are a little bit more mature, and a little bit more maybe been in the market a long time, it’s much more like a plateau type situation. And there’s not these huge fluctuations. So the companies that are having the most issues would be high growth in demand. They have resource issues in terms of finding the credit professionals to also manage the amount of invoices that are coming through on of course, as I said, commercial flexibility to get deals over the line, etc, etc. So there’s all sorts of this is my very layman’s set of answers, I must have been impossible for me to give you a comprehensive or just articulate way, if this is the problem. Yeah, it does

6:12
feel like the world outside of political issues. A world is going through economic constraints at the moment in terms of like downturns, particularly in Europe, certainly in North America as well. We’re seeing inflation a lot of different places. And you just wonder if companies are seeing increased pressures on cash flows, and one of the ways they can do that is by then looking at their receivables process, and maybe they haven’t invested enough already do they go back and then start to start start to invest a little bit more on it to free up free cash flow?

6:38
That’s absolutely, again, wanting to be diplomatic, a lot of companies that I’ve spoken to are and I looking at freeing up more working capital, because I’m sure you know, from reading the news, a lot of companies, which you wouldn’t have thought of even dreamt of years ago are our cotton, dyeing their staff, but then streamline their operations, some of the really the big hitters across the world. So and I have had some conversations, where they emphasise that maybe projects that they’ve part, huge financial type, regurgitation of money that’s just sitting there that hasn’t been properly worked from a credit management perspective, that is now becoming more of a focus for CFOs, more of a focus for boards to get that money back into the coffers. So yeah, there’s definitely an emphasis on and catching up for a little bit of putting things on the back burner. Yeah. So

7:29
you think it’s good, the whole receivables piece, account receivable is coming up in terms of the priority, so there’s going to be a bit more investment in it? Because it’s it is an opportunity for folks, right?

7:39
I mean, again, it depends on the company. But yes, certain companies that would have, from my experience said to me, Michael, are really talking to you. It’s been good. I’ve enjoyed interacting, but it’s not something we’re looking at. And I, of course, to anybody out there who’s looking to do business, this is always disappointing, then you put it on six months, then you put it on six months, they keep saying or we might look at that the second quarter of next year. So project wise, we’ve always been quite far down the ladder. But nine in recent months, I’ve noticed that mid range on the ladder, we’re not number one, but we’re they’re giving us a lot more time now.

8:13
They’re earlier just mentioning about how much things have changed in the last two years you can to predicted the last sent me the last five years ago, five years ago with no prediction. Nobody. And we’ve only got visibility over what we know today. Do you think? What’s your outlook for the economy? Do you think we’re Where do you think it’s gonna go get any sense of that the

8:30
general consensus from what I can gather is that things will we’ve literally dodged the sort of recession bullets so to speak, but nobody knows. Obviously, a lot of it is down to politics or who gets in what happens? Will there be reconciliation, maybe in certain areas of the world, let’s get inflation dying. Let’s get the let’s avoid the economic collapses. Let’s not make silly political decisions, impact our life. And also let’s try to get over the pandemic as well. But again, that’s just me going on. I kind of like, prediction wise, I think Touchwood I think there are better times ahead.

9:08
And I think from a company point of view means running a good business as part of that, right? So so you’ve got to have good processes, transform your processes, making sure they’re being as efficient as possible, making sure you’re maximising working capital as much as you can as well, I suppose. Part of this, these kinds of shows are the duty to maximise some of that and put those opportunities out there for folks, right

9:27
100% I’ve gone to numerous events over the years unfortunately, starting to get a bit more mature Chris and I’ve been doing shows where it’s all salesy, and it’s all razzle dazzle and everybody trying to twist your arm to buy this and buy that this is very much educationally driven. And it’s something I would highly recommend as a if you’re looking to know about what’s in the marketplace, whether it be software, whether it be AI, whether it be ourselves that are very people orientated, reputation orientated, integrity orientated. So it’s really good to come and have conversation But more importantly, you can align that with learning about techniques, that will mean that you can take them back to your respective companies refine your systems, there will be people going away from this events driving better performance in the months to come here.

10:17
It’s interesting how we always used to think of companies and software really as being standalone, almost like isolated and really the last sort of 510 years, we’re increasingly becoming more interconnected, even from an outsourcing point of view is kind of like it’s rather than just being I’m going to do everything myself. It’s like, I’m going to rely on other people to do it. I’m going to run a separate software system. And you’ve got API’s in the in the technology world, and you’re getting business outsourcing in the in the almost like the employee world, it’s interesting how becoming much more interconnected than we ever had been before, I think.

10:45
Yeah, yeah. Again, API’s, I’ve sold API’s in the past, there’s a lot of integrated solutions. There’s all sorts of, I have a couple of boobs beside me that are AI oriented, I’m just speaking generally, this is not a specific plan. But I think a lot of the customer service side of things in the world will become more AI orientated. But you can’t take away the personal approach, you can’t take away no matter how techie you are, no matter what people have fears that their job is going to go to some robot or so on. I got there. At the end of the day charisma, the nuances, the human interaction, I think was highlighted very much in the pandemic, it was a big loss that teams could do a certain amount, but in person, you can’t change that. So I think these AI functions and API’s and all the various bits and bobs, they’re all great. They’re all wonderful. But when it really comes down to the nuts and bolts, these are a complement to the human skills and the personnel that are here. But again, it’s all a matter of opinion, for all I know, some companies will let their software, you know, take over from their staff, but I really don’t see that happening from a personal opinion,

11:50
is interesting. Through the pandemic, we all did stuff on video like we are today. But at the end of the day, you’ve gone there in person because there’s added value because it’s about relationships as pertains to human contact is important.

12:02
I never say Hang on, we’ve obviously had a lot of interaction on a friendship, but it’s been a wonderful experience meeting people. I met people last year here, they remembered me for just some humour and they remembered parts of my life, you know, that I shared with them and you have a kinship. Obviously, in Persian. It’s nice to meet people, obviously teams, I must emphasise to you and I or any form of technology is absolutely phenomenal. Because it means that anybody can reach anybody. If you’re in a global position like myself, you want to speak to somebody in America, we’re observing my clients or be asked or anywhere AIPAC or Australia. If you’ve got you can literally just click a button and chat to them. But obviously to meet them then you can have you now have a launch, you can have a charge you can they can see your body language. It’s not just a case of going on to teams. I say this respectfully with your pyjama bottoms on your shirt on and pop on over to the shops at lunchtime. There’s more of a lesson or commitment to actually making sure that the relationships go back to the status quo. They were pre pandemic.

13:02
Yeah, what you don’t know is I do have my fluffy slippers on today.

13:08
I can assure you, I don’t have my pyjamas on crispy goes if I have my pyjamas on here, I think I would be probably lifted by the Lord that our local Portuguese police wouldn’t be wouldn’t be a pretty sight. But I have been known to wear some very strange outfits in my day. But what it was it was more just for our brand awareness. But suffice to say the brand is well established here and I and in in other events because we’re doing it’s not just me here. I have colleagues doing events in the UK. There’s events in America, there’s events in Europe all over the place. The most important thing is meeting people. And of course it goes to fights in a trade as credit insurance is like literally it’s the stallion of credit insurance across the world. It’s the absolute go to reassuring, managing trade, you know, in the world of actual trade credit. We are obviously a caveat to that. And of course, it’s we’re very proud to be associated with such a well known name. So

14:05
it helps us to fantastic as you said, you’re at the Oscars of the the outsourcing world. So I think last time I saw you posted a picture of you on the bike. So I don’t know what we’re going to see this year. So I look forward to seeing what I’m gonna see not a pretty sight

14:15
of Chris, to be honest with ya. Whenever I see these pictures, I have this idea and maybe I need to stop doing it. I have this idea that when I’m dancing on a dance floor, or I’m cycling on a bicycle that I’m in the Tour de France, I still haven’t lost out on the bike and I read and then I get the video and I see I need to go on an immediate sort of smoothie diet. And then it’s a bit like when I’m on the dance floor. I’m going Why am I pretend to be Justin Timberlake in midlife. It’s hashtag midlife crisis.

14:47
Okay, the only good science that sounds like it’s been super interesting anyway, so are these things I always find informative. So Michael, thanks very much for making the time. I really appreciate it. So it’s great to hear how it’s all going.

14:57
Really appreciate it. Chris, you’ve been very kind and I wish you every success and keep me posted

15:01
we’ll do okay thanks