Name: Trade Wars: Securing Your Cash Flow in an Uncertain World
Uploaded: 2025-04-17T11:30:41.936Z
Duration: 58 min 28 s
Description: Trade Wars: Securing Your Cash Flow in an Uncertain World

Transcript for "Trade Wars: Securing Your Cash Flow in an Uncertain World": And we're live. I think so. Hello. Hello, everybody. Hi, everyone. Welcome to this Agicap webinar, on the trade war and how to protect cash flow in uncertain times. Very good to have you all here today. Please do not hesitate to kick off, this webinar from your side by letting us know where you're dialing in from. I know we have a very international audience here today. So please do write in the chat on the right hand side. I think also, you should be able, if any, of you want, to translate this webinar via some AI functionality at the bottom right of the screen. And you should also, be able to see, my screen, which is currently saying trade war, how to protect cash flow in uncertain times. If you can't, please also comment in the chat. Let us know, and Benoit or myself will let you know how to solve the technical issue. I want to say upfront, hopefully, this content will be thought provoking, so please do share any questions as we go. Otherwise, let's get to it. So here's what we're gonna cover. We're gonna talk a little bit about, the impact of, mister Trump's, decisions and tariffs that he's been imposing on the world and what that means with some real life examples of changes for our economies at the macro level. Benoit is then gonna share, some examples of how to combat this risk, with advanced scenario planning. We'll then dig into how you can also, support your businesses, by improving the way you manage your customer payments. And then last but not least, we'll look at how to reduce costs by taming rogue spending. And then at the end, I'm hoping we can have a really good discussion based on some of the examples that we've been through and then also, share also some stories from your own businesses as I know the impact of these tariffs has different impacts on different businesses in different ways. So it'd be great to have a really thoughtful and, interesting discussion at the end as well. In terms of myself, my name is Nat. I head up the partnerships team here at Agicap UK, and I'm joined by Benoit from Agicap HQ, who I'll just let quickly introduce themselves before we get into the content. Thanks a lot, Nat. So, yes, I'm dialing in from, beautiful, Leon, from our headquarters. I'm Benoit. I'm heading the content and the research team at, Agicap. So we'll be sharing. You will see a few pieces also from our research that is going to, I hope, shed lights to, on the the different challenges that companies are facing today in this, and the volatile environment and also, suggest some actions to take to tackle those issues. So very excited to to be here with our UK team. Thanks, Benoit. And okay. Without further ado, let's get to it. So I'm just gonna say quickly, as I know there are some, people who may not be that familiar with Agicap on this call, a little bit about who Agicap are, and kind of why we host these webinars as well. But we are the market leader for cash flow management according to g two. If you don't know it, g two is software comparison site, and Agicap, is the market leader for cash flow as well as mid market treasury. In terms of what that means in practical terms, I think most of you are from finance functions or treasury functions on this call, but Agicap is typically covering a few different, parts of the finance function. The core of our platform is cash management and cash flow forecasting, so very much treasury oriented activity as well as kind of treasury reconciliations. And then we also overlap into, the FP and A and kind of core accounting functions via budgeting and reporting on the FP and A side and then, good credit control, which is one of the examples we're gonna dig into today and also supply payments as well. So that should give you a good sense of kind of, who we are, what we do. As a platform, that kind of really breaks down into four modules. So the cash flow forecasting and the cash management, and the top here is what we really consider to be the core of the AlgaeCal platform. It's about centralizing visibility of your cash flow, both from a long term point of view, which will be really important for, the scenarios that Benoit will go into later on, and then also short term point of view via direct bank connections, so connecting directly to your banks and pulling that information all in into one place. And then payments in the bottom left, so making payments to your suppliers, centralizing those approval flows, and then identifying your late paying customers and coming up with, automated workflows to encourage them to pay more promptly, which is another one of the examples Benoit will go into in today's session. So as a company, as, Benoit said, headquarters in Lyon, we founded back in 2016. And over the last nine years, we've grown to be operational in 12 different countries. We have offices in six. We have over 7,000 clients and over a 50 commercial and technological partnerships. So less about Agicap, more about Donald Trump and trade volatility. Let's get to it. So why are we having this discussion? Well, I think no one has missed, no matter, how uninterested they might be in politics, the impact of, Donald Trump's tariffs since his return to the White House. For you guys as businesses, and finance leaders, it is, a very difficult situation to manage. And I'm just gonna go into some of the examples, that demonstrate the level of volatility that we have. Here we see that the trade war is, producing a level of volatility that we haven't really seen, or we've only seen once since 02/2008, which was the COVID pandemic. And now this is where, that level of volatility is today. So it's the third biggest peak really in the last twenty years. So a massive, massive impact on the financial markets. And one example of that is to do with the semiconductor trade. So Donald Trump announced originally kind of that a 30% tariffs on Chinese products. But in terms of semiconductors, it's a real restriction on the ability of US companies to export certain chips to China. So we really see the political element of that. And in terms of value for big US companies, for NVIDIA, that's wiping out, you know, 5,500,000,000.0, of dollars of value across their value chain and potential lost revenue to go with the pressure it's also putting on many allied countries like Japan, Netherlands, South Korea, to limit kind of exports to China as well. If I can add maybe just one thing that, I think you all remember maybe from the previous Trump administration, they all they did in '20, '18, they already so before COVID, they had actually started to, implement new tariffs on, China. They they were only targeting, China at the time. And, so they implemented a new, they raised the the tariffs, then they started to back down, raise them again. And what interrupted really the the movement was the COVID lockdown, actually. So then, the some of those tariffs were kept in place by the Biden administration. This is not something that we've, I think we've mapped a lot in the previous years. And then what's really changed in the last months was the the magnitude with which, the Trump administration has increased, tariffs. The number of countries also that were, this time targeted by the those tariffs, including, as Nat said, the light of The United States. So what we are seeing is that I think you all, follow the news. We are seeing that the the administration has implemented a pause in the in the tariffs. We don't know exactly how the the allies and the competitors are also going to, and if they are going to retaliate or not. Again, we don't have a crystal, a crystal ball. And so the the latest development that Nat was sharing is this, trade restriction, sorry, on the microchip, exports. Again, just to understand that here the situation is, is again very, volatile with developments almost every day, and that are sometimes targeting a specific industry or specific value chain, some other times a specific country. So this is putting an extra pressure on, the whole finance team in The UK, but also, all over, the world. Thanks, Benoit. And I think you've touched really kind of on the key point there as well, which is that in an environment of such volatility, is also what makes it very, very difficult for businesses, like, on this call, to know what's coming next. Donald Trump could change his mind at any point. The reactions of different countries is changing as well. You see, China have imposed their their own tariffs, and the result of that is the the WTO has really slashed the trade growth, the growth forecast enormously. So I think at the beginning of this year, they were forecasting 3.3% growth, and they're now forecasting a contraction of the global economy, of 0.2%. So an enormous reversal of the forecast. And I think in Britain, the same. The Bank of England has revised its own forecast, to go from, I think it halved the forecast in total to 0.75%. Mhmm. So, overall, what we go from is a world where, okay, things are looking up to actually now a global trade decline, where the WTO thinks that global trade volumes could shrink by somewhere between 0.21.5% across this year, where previously, they've been forecasting 3%. So really, really a massive, massive turnaround for the negative, sadly. In terms of the US dollar, this has also been a disastrous start to the year. I think, one economist used the word catastrophic for the world, but even more catastrophic for The United States. And you can see the performance of GBP against USD here massively, massively rising for the first time in, quite a long time. And then in terms of interest rates, we also see right up until the end of next year, a further decline in interest rates. So overall, a massive massive global adjustment for businesses that could also change again, in the near future with, we've already seen Donald Trump change his decisions, delay some of the tariffs, very, very quickly. So a huge amount of unpredictability across several macroeconomic factors. So how can businesses how can you guys, combat this? I'm gonna pass over to Benoit now to talk through some of the ways that scenario planning can be used to combat the uncertainty that comes with some of these macro economic changes. Benoit, take it away. Thanks a lot, Nat. With pleasure. So feel free again to, ask questions. Again, we are not economists, so we don't know what is coming next. What we can and what we want to share with you are ideas, actions that you can take to really better manage cash flow in this uncertain period or in the in the next crisis when it comes. The first thing is really around scenario planning. This is really key to protecting cash and liquidity. The first pillar of scenario planning is really the ability to build, robust scenarios. So if, in most, companies, there is only one, cash flow forecast, usually medium term, thirteen week, cash flow forecast, not always really up to date, especially in, in SMBs. So the first advice here that we, we always share is to always start with a solid baseline. Meaning, if, for instance, in your company, you don't really have a cash flow forecast, today, you are mostly, managing the company through, for instance, the the p and l and the ERP. It's not an issue at all. The first thing that you need to do is to build your first, cash flow forecast. What we recommend is, to start with a long term view. An annual cash flow forecast for the next twelve months at the at the monthly granularity. You take this so called data, from your bank accounts going, from the past twelve or twenty four months depending also on the evolution of your business over this period and the the seasonality of your business so that your finance team, your, your treasurer or the treasury operator get to better understand how cash, circulates, in the in the groups. Once you have this, you can build a first cash flow forecast based on the initial p and l. So I would say the p and l before here, before the the the tariff war, it was the same during, COVID with the lockdown. The company would take the the the first p and l before, during the the Brexit, etcetera. That's the first advice that we give. Start with what would your cash flow have looked like without this specific situation. Then, in Educare, for those of you who are using, or, being onboarding on the tool, there is a specific module to do this, the p and l to cash module that allows you to immediately translate your p and l into a cash flow forecast. So that's really super useful, for this. Once you have this baseline, then you can start creating, scenarios. We recommend at least, to start with three different scenarios, and where you are going to push the indicators, so and to to try to understand what would be the impact on the cash flow. At the very beginning, we also recommend not to start with too many variables, especially if it's the first time that, either you are running a cash flow forecast in your company or that you are running those, two scenarios. And, again, if this situation is a little bit, complicated and, quite volatile, which is the case, today, It's better to start with a few scenarios, a few variables that you really understand well and then to build, on that. One of the things that you can, do here for, those of you that are using, using, Agicap is we can create, of course, multiple scenarios, and you can link the scenarios between one another. Meaning, what what you modified in one gets immediately, modified in all the others. That's something that is super useful because we all know that in Excel, usually, it's quite hard to maintain those, those scenarios. So here, what we the the basis for this scenario planning is really to allow them for, war room, war games. Meaning, if, we go back to the example of, the trade war, say, we were exporting the company was exporting is exporting to, The US. Tariffs are rising. Is it still, is it still possible to, to be present in the market? Should we maybe, open a factory there, change a little bit, change the supply chain, etcetera? If, we stop, being present in The US, would it be possible and feasible to reenter the market, say, in six months, in one year, easily or not? Is there a high probability that our competitors that are already there will maybe preempt all those, market share, making the reentry on the market quite impossible? On the contrary, do we have maybe a better pricing power, a better supply chain than our competitors? So maybe it's an opportunity to, double down, on The US, market even if the tariff are paused. So that was what we were mentioning with the, the war, the war games in a sense is to really look not only at the cash flow, but really at the business perspective. What can we do about it? What can the business do about it? And then based on this, you will start to understand what should be, could be the most likely, scenario. This is the scenario that is going to then replace the the the p and l that you started the the year with, and that is going to become the main, scenario. Again, especially for the companies that are still using, Excel, for this, you will notice, and I think you already know that if you've run through scenarios again and again on Excel, you will notice that at some point, it's quite hard to maintain all those different scenarios in Excel. That's why, if you don't, use a cash flow forecasting tool, we recommend focusing on one or two scenarios that you master, really well, and that you can update along the other way. Once you have this, especially if it is done by, the treasurer or the the treasury, operator, so it could be the CFO, could be an accountant. It's super important to share it with the rest of the company so that, you can also see if, the scenario holds, and the integration they hold, and, so that you can also inform the decision making of the, the rest of the management team, the manager of the different, business units, but also the other, team. If it has, impacts on the procurement, for instance, it's super important to explain that to procurement. What we see at Agicap is that in most companies, they don't really have yet a cash culture. Meaning, most decision when they are, taken, even if, they, they are related to to finance, to big finance indicators, this will be mostly accounting indicators, p and l indicators, meaning you also have to do some education. But this is honestly an excellent opportunity for you to deploy, better cash culture, to consolidate the cash culture in the company because it's really, I would say, the, the the basis of, of change management. When there is a shock, people are suddenly, more aware that there is a there is an issue, and they are more keen to listen to potential, solutions. So on your side, if you've been, vying to develop and to strengthen the cash culture of your company, I think this is really a super, opportunity to educate your management team, the manager of the business unit, the finance team to some extent, and the other teams to what are the impact, of the this situation in terms of a cash flow forecast, and what are also the differences between the p and l on the one hand and the accounting, the accounting culture and the forecast on the on the other. Once you have, done this, again, for, this mostly reminder for companies that have a a treasurer, sometimes what we see is that those war games, in a sense, they are going to be played mostly at, the management level or in some parts of the the company. And at some point, especially in in terms of crisis and the high, high volatility, Decision can be made, but without them being passed on, to the treasury, function. So that's, one of the example that we've, that was shared with, client was that, during a previous, crisis, which was, COVID, they were able to snap up a competitor, a company that was, fragileized by the the whole situation, but they did not immediately pass that information to the to the scheduler. So they had to come up with some scenario, for the for funding the acquisition in a context where, cash, dried, a little bit more than what was expected. So, once, once you have, this, to keep the treasurer or the treasury operator involved or you if you are the CFO, what we really recommend is rituals. Rituals where you are going to be able to, check indicators, check the impact of those indicators in the, into the, on the scenarios that you had planned. Check also and share the news around, your cash flow forecast to inform and keep informing the decision making of your, your colleagues. Once we have, this for the live, scenario monitoring, What would be super important is for you to try to have some real time indicators. So may they may vary from, from one day to another or even in a day, to inform decision making. So it could be the the the purchase order that you have in, in The US if you are exposed to the to The US market. It can be forward forward rates, forward, currency exchange rates. I mean, there will be a few indicators that you may be able to monitor, that will help you better understand if you are going in the direction that the scenario that you've, chosen, is is going to be the one that, that applies. And you shouldn't neglect, what we call grotesque, scenarios. So going back to the to the COVID or to the to the Brexit, period. If we take just a few moment to to remember the the situation, I would say, before that, It seemed quite impossible that we would lock down the companies, that, the the economy would ring to a halt. This is something that we would have thought, honestly, impossible, before. And when you are doing these, war games, these, war scenarios, I would say, it's super important to not neglect those. It doesn't mean that they will happen. These are like the the black swans. If you are familiar with this this notion in, in in finance, it's super important to, to at least run them to see what would be the, the impact because, usually, it is massive. And one of the things that we we fail sometimes to see are the second, third order consequences of this ripple effect on the value, the value chain, etcetera, that then, of course, degrades even more the the cash flow. And here, one of the things that is then very important, to be clear on, at the company level, but also when you are, communicating, is to have a document, where you list those different scenarios. You archive it. If it is in a in an Excel, it's not an issue at all. You just put that in a shared folder. For instance, you archive the Excel that you've been, with which you've been running the the different scenarios, maybe a few ideas that you have to, to tackle the issues that arose, with those scenarios. And then it's super important that when you explain the the funding policy that you have, the investment policy that, that you have, you explain which are the scenarios that this funding policy take into account and which are the scenarios that are not taken into account. Going back to what we just said on the real time indicators, the idea is that those real time indicators, they could allow you to maybe, foresee that we are going, that the likelihood of a scenario that was, like, a black swan scenario or scenario that was not taken into account in your funding, policy, directly would increase. So maybe it's important to, to set up a meeting, to, call, maybe the bankers. I don't know. But maybe to start, looking more into this scenario, the the consequences of this scenario, and what you can do at your level to, again, protect the liquidity of, the company. So that's the reason why we really recommend not to neglect those, those scenarios to really archive what you've been doing. If you are using a GTAP, you know, you you have all your scenarios, here, and you can, it's quite easy to move from one scenario to to another. But in any case, very important for you to keep a track, of that. And, you, honestly, you can use many tools also for, for this. You can record a minute session in a with a with an AI, for instance, so that you can really track and store all of those this information. And if in one or two weeks, one month, two months, you have to go back to a scenario that you had already kind of, started to look into. That way, you don't have to start from scratch, and you can immediately, react to what is, happening. So going back to a few, examples that we, wanted to share if we get we can go on the next slide. Thanks a lot, Nat. These are some scenarios that, were used by, treasurers, clients of, Agicap during, some of the crises that we went through and some that are they are considering, today. So mostly, as we said, we are for the past, crisis, we are referring to either the the Brexit or the the COVID, lockdown. So some, some example of those, scenarios that were, used. The idea is that it's super important if I can, just, share also some, some advices here. Super talk to name star those, those scenarios and then to have a visual representation of those, scenarios. So, again, it's something that you can do very easily in, in Agicap. That meaning, not only have the the Excel, tables, but being able to compare those different scenarios maybe in the same, chart with the impact on the on the cash flow. Flow. So here, if I take some, some example that, that we that we had, so for for the first one, during COVID lockdown, the context was here a real estate business. You the the the notary the notary stopped doing a senior year, so the the market completely stopped. So they use this scenario to justify, receiving financial support from, from the state, including a fiscal, fiscal help. During Brexit, another company, when a GBP was, was helping, they looked into, more the the model import and the the cost that were that came from, UK that were exposed to this. This is when they realized that they had not edged their their, their GBP exposure. So they had to renegotiate terms, but they were able to do this a little bit earlier because, they saw the impact that it would have if it if, FX, continue going in the in that direction. So for the third scenario, this is something that we've already discussed a little bit. If you are already present in The US, you are contemplating maybe moving out of the country. What would be the impact of losing this volume? Could you maybe sell it in a in another, market? How could you neutralize also the impact on the on the cash forecast? Can you do you have pricing power in, in some, other markets? Are you also able to maybe save, on some expenses that you had planned again to try to neutralize the the cash flow impact on, on this? What is also super important is, maybe on, again, at a strategic level, it will force you to, open new segments, open new markets, shut other, other segments, especially if, the fact that, you if your company, again, in this, in this US context, but could be, could be different. I think you all understood this. Say that you had a a very important part of your margin, and cash flow that is coming from The US and that you are using this to finance other segments, other operation, maybe a new offer. The second other consequence of maybe exiting The US is that immediately, either you are going to have to find new financing option or maybe to, shut down the the new offer that you are planning. That's the reason why it's super important to to have those, war, war games in a sense and to really understand the second order, third order consequences of those, scenarios to then on the business, of course, and then link that to the cash flow part and to the liquidity, the liquidity plan and the different, funding scenarios that, that you have. On the other hand, because we've been here contemplating, I would say, a negative impact for the company, as we said, it's also, maybe, it will open new opportunities, for you to make an acquisition abroad. Super important also to understand here. Is it going to be an acquisition that maybe is going to be a bit negative at the beginning, that is going to, require, cash transfers from the the parent company in The UK, in order to to finance its development. So same, is it something that we have already planned in the in the funding, requirements that, that we have? Etcetera etcetera. We can, the idea is that, we can take many, many scenarios, but what we wanted to share with, Nat, what we wanted to share with you is just to try to have as many scenarios as possible to select those that you want to run to store them, and, going, going back maybe to those scenarios, to to really better understand what would be the impact on your liquidity, how cash flows in, in your group, which is something that is, honestly, from what our clients are telling us, quite hard to do sometimes, because many companies that we are working with at the beginning, they don't really have, the ability to consolidate their, their cash forecast, but also to consolidate their cash position, and to automate the cash, pulling. So this is something sometimes that is also quite, difficult, to do. So that's what we wanted to share on the scenario part. If you have questions, we are more than happy to, to take them. That's I'm then giving you the the mic, to show also some insights that on the the research that we, that we did at Agicap that can shed some light as to what we were saying. Yeah. Thanks, Benoit. Super comprehensive, overview of, how companies can transition to a cash culture, and also some of the examples, that's good to look at, for you guys in volatile times. I think, get very clear, start with some of the basic, risk scenarios. Run at least three, in terms of, looking at the impact, that this trade war could have on your business. But, of course, no scenarios matter if you can't trust the information that's in front of you, because then you're basically, planning scenarios that are not relevant if your information is not accurate and up to date. And this is one of the insights that we, picked up from our, cash flow survey that Ashkel conducted last year at the end of twenty twenty four. So, this is a survey that we ran across all of Europe. So you can see we've got five countries, or four countries represented on this graphic, with the average as well on the left, so across Germany, UK, Italy, and France. And we found that Britain had the most unreliable cash flow forecast at 37%, meaning that if you think just the pink, the purple, and the red here, the red being horrific, and, this 30%, I think, if I'm not mistaken, bin wise, more than 20% variance in your cash flow forecast. So Exactly. More than 20%, based on what you think is gonna happen, actually happens. And, that is, in these times, a very, very, large variance that could obviously increase as more pressure, as, businesses try not to pay their suppliers or try to delay paying their suppliers. It's harder. We expect this kind of cash flow, the reliability of the cash flow forecast to get harder and harder to maintain and more effort to have to go into maintaining it. So when it comes to thinking about these scenarios and you wanna, derisk your business, which is, I think, is one of the messages, certainly, I'm hearing most frequently in the conversations that I have, with clients at the moment, is the world has changed. We need to derisk our business. You need your information to be accurate. Exactly. And maybe just one comment on also on, on this. The reason why, the CFOs in those, countries cannot, I would say, trust the the forecast, differ a little bit, depending on the country. So if I look at, France and, honestly, Continental Europe, it's mostly, it comes down to, spend control. Meaning that they have unforeseen expenses, that they did not plan, and that's the reason why the there is a high variance between the cash flow forecast and, and what happens in in reality. We are going to talk with Nat in a in a moment about, this and what you can do, there because it's very important to get that into a control. What I wanted to underline is that in The UK, it's quite different. And this is something that is interesting to understand here in this particular context is that the main reason why there is a gap between the cash flow forecast and the actual, is linked to the sales forecast that is, that is usually more volatile in The UK than it is in, in the countries that we surveyed in Continental Europe. Meaning, if, we go back to what we've just said, if you are present, for instance, if you are exporting in The US or you have, an important, part of, of your revenue that is tied to The US or that is exposed to those tariffs, I would say that UK companies are even more exposed when it comes to the impact on the reliance of their cash flow forecast to do this specific environment because they tend to be, less precise when it comes to a sales forecast and and, and the moment, when, and when clients are actually, paying their, their invoices, which is super transition, even even if it was not planned that way. Super transition for what we are going to say then on a on a customer. Thanks, Benoit. Wait. Cool. So, Benoit, I think I'm gonna hand back to you for this, real life example of the cost of inefficient collections processes. Exactly. So what, Nat was sharing is that, we are always, discussing with, with customer, with, with partners, with, prospects, to try to better understand what, they are doing, why they are doing what they are doing, the way they are, doing it in order to develop a better product. So here, what we wanted to share is a it's a real life, actually, example. And we believe it is it is interesting because it encompasses, the all the limits of the current, customer running processes in a lot of different, companies that are not always, SMBs. We shared in this example the company that we are, mentioning. It's €150,000,000, in, in revenue, companies. So this is not only an issue for, I would say, smaller, companies even if at a more macro level. Those issues, they are, of course, more faced with by those, those companies. So here, what is interesting in this example is that you can see that the collection process in general is quite, quite broken. The first thing is that there were no automation, no learning software that was used by this, this company. Collection was managed manually on paper. So it meant that what we've seen in this company, but we've seen this, with a lot of other, clients is that what they would do is that they would print the the concern that was in charge of customer, learning. So there was just if I pause on this, one person that ended part time customer learning for this, this company. So you know that this also put pressures on the finance team, structure that, that you have. Meaning that what your consultant would do is that, they would print the ledgers and then looking at the the the printed document, they would highlight manually, they would highlight the the most important, invoices that were not paid. So it meant that for the other, they wouldn't do anything. So it was the their gut feeling of what was, either an important invoice or, invoices that were, that were too late. Once this was done, what your content will do is that she would pick a few of them and call the customer. For the other, she would drop the the printed, the printed document to the commercial director, on the commercial director desk asking him if he could, go and see those clients, to make sure that they would pay. So what, what actually happened is that the commercial director would then, on the, the next day, he would jump on his car, and, he would go and see the clients that the content, told him to to visit to see if it was possible for, for them to to pay. So he had to physically, visit, visit them. And the the content, was, then calling, calling the clients. But what the the treasure that was brought in, notably to help, with this notice is that during the conversation, what your content would do is to say, you have, some invoices that are not, paid. Do you know when you will be able to pay us? So what the client, noticed is that it was quite easy for them to pay, late the invoices of this particular, supplier because they were not very tough, I would say, when it comes to, dining, and they wouldn't alter, for instance, the delivery of the goods, nothing. So it meant that they would say, yes. We are going to pay you maybe in one week, two weeks, three weeks. They would give a random more often than not, a random date. The content would then say, okay. Thank you. Avoid really the tough conversation. She wouldn't log this somewhere. So for instance, she did not follow-up with an email saying, thanks a lot for the this productive conversation. I noticed that, the invoices with, those invoices numbers, these amounts, they are going to be paid on this specific date. So I expect the payment by the next day. I'm going to be checking, of course, with you if we don't receive this payment, etcetera. And, actually, she wouldn't always call the client that she said, she would, call. So this whole process was quite, you know, inefficient, of course. And, again, here we are only, talking about the clients that, they, they decided they wanted to, for which they they really wanted to to do this, this collection. Meaning on the finance part, it has a direct consequence as the company had to rely more and more on, notably, factoring, to cover their working capital, requirement because the DSO kept, increasing. So it means that they had a stronger revenue, high margins, but on the treasury side, on the liquidity side, they were highly cash constrained. And this is the perfect example of, a company that can then, that is quite vulnerable then to those, external shock. The shock today is the the Trump, the the the trade war, the tariffs. Yesterday, it was, the Brexit. It was, the COVID, the lockdown, the global financial crisis. You you've seen them. You you lived through them. Tomorrow is going to be something different. That's the reason why, we really, strongly advise the the financial direction that we are working, with to really look closely at the processes that they have. And if they are going to be able to weather an external, shock for which, usually, they are not really, prepared if they are, scalable, I would say, and, they are going to help them, weather, this, this storm. So it's example for us, and that's the reason why we wanted to to share it. It's it's a good example of a company that, then, of course, they did not, they did not go bankrupt. They completely revamped the the the way they would do a customer collection, and, and it helped them, rely less on, on factoring, generate a lot of excess cash, invested, to grow, invested in a short term cash investments. But here, what is interesting is that it's a a good example of, a company that is not managing it, as well as, it could, given the importance of it and the means that the company, has. And then I'm going to, let you comment this, but, it's specifically important, today as we are seeing, DSO, rising. Absolutely, Bernard. Yeah. I think a really good example of, how an actual business inefficiency has real, financial consequences. And, again, back to the survey, I think already at the end of twenty twenty four, 58% of UK CFOs, if you can as you can see on screen, were reporting increasing DSO already, and Trump's trade war has only increased this. I think one of the first things, businesses do in volatile environments, as we know, is to delay when they pay their suppliers. So, actually, if we think back to this example in this kind of inefficient process, which sadly, even though this company fixed it, it's not a a process that has been fixed by every single company out there. It becomes even more important to have an efficient means of chasing your customers for payments. And with Agicap, there's a three x, there on, improving this process. I think, Benoit, you'll talk quickly about some of the changes that customers have been able to make, when they implement Agicap, automation, for managing this process. Totally. What we've seen, we run a survey on, 1,600 clients that are using. It was, like, one year and a half ago. Actually, accomplished automation. We what we see that when the it was mostly on SMBs at the time. What we, we saw is that when an invoice was, late, there was a 25% probability that, the invoice was then paid in the next, two months following the due date. With, Agicap, accomplishable, automation, the probability tripled. Why? For, and it had it had other effects, but mostly because there was a systematic, collection effort through, emails. We have, you can set up different types of emails depending on the on the amount or depending on the how late the invoice is. There is even an, an AI assistant that helps you write the the email and adapt to the the tone of voice. The templates I where, that, that are used in the the tool were created with a collection, agencies to make sure that, they are quite, helpful, for you, on your that they support your ordering, processes. And the the main thing here, the main advice that we wanted to, share with you is what we call preemptive, running. Meaning, where we see, the most, ROI is when you concentrate, say, 70% of your efforts before the due date of the invoice. What we, what we've seen, with, clients with whom we've, worked is that Yeah. For them, collection starts when the the invoice is, is late. Actually, and this is something on which we are trying to, educate, educate, clients and, and customers, is really that collection starts when there is an invoice. Meaning, if you really want to decrease the SO, if you want to really streamline, your collection efforts, you should spend 70% of your time, effort, money working on the invoices before they are late. Meaning, systematically remember ten days, five days, before the invoice is due that the invoice is due, allowing, clients, to pay them, providing maybe, payment, links. This is something that is super important. When you are also doing this, remind them if they have, invoices that are late, that they are some other invoices that are, that are late. Maybe you can do something that you can do with Agicap, but provide them with a a payment portal where they can pay immediately all the all of their, their invoices. And once the invoice is late, this is, this is when, you keep on doing this systematic, dunning, following up, on the depend that you usually use on a weekly basis, or even on a daily basis if you have, if you have a credit manager in a in a team or a credit manager operator. And, what is, then also, very, key is to be able to track, DSO, about you receive goal, the aging balance, but track that as much as possible in real time to make sure that the the collection, efforts, are really bearing fruits and to link that with the cash flow forecast. Meaning, if you are seeing if, the credit management team, for instance, is seeing that, the the DSO, the is starting to, to increase. It's super important to, I would say then pass on the information to the the treasurer or the the content, the the CFO so that they can immediately take that into account in their cash flow forecast or compare it with, what they had in the their cash flow forecast. If we go back to what we've said on the, you know, the real time indicators that you can, track, maybe that way you are going to say and to understand that, DSO is, is increasing a little bit higher than what you had expected. Or on the contrary, it is increasing, but less than what you thought. So so far, we say so good in terms of the cash flow impact for this. Even if it doesn't mean that you shouldn't, halt, the the collection efforts, just mean that you have already the the funding that you need, even if the your DSO keeps, increasing. Super clear. Thanks, Benoit. And then lastly, the kind of the third lever, to manage risk in this, difficult environment is controlling extra spend. So I think Benoit, on a previous slide talked about how, in France, Italy and Germany, the main reason for the, unreliability of the cash flow forecast was uncontrolled spending versus in The UK. It was an unpredictable, sales forecast. In The UK, it's not to say that rogue spending does not exist. In fact, nearly two thirds of, midsize companies, also struggle to, tame rogue spending. I think midsize company, we're really talking about the mid market here, so companies between 25,000,000 and, 500,000,000 in terms of turnover. And here, if we just break down this graphic, if we focus on the middle column, you can see again that the pink and the red. So 58% of companies show that it is a recurring problem, and they're either adjusting their budgets to account, for it or their budgets, are often exceeded, as a result of rogue spending. So spending that's unforeseen or spending that's uncontrolled because, they don't have a good process to manage how employees, process expenses. So, Benoit, tell us how can, the finance teams on this call, rein in their own company's work spending, and what sort of impact, can it have for them in this environment? So a few, advices on this, point. The first, thing that, is key is, to define a clear shared, company wide spending policy. One of the the examples that we wanted to share, is that, at a client company during so it was during, COVID. They, it was not specifically the the lockdown part you will see why, but they, implemented a new, corporate policy where they asked the manager to reduce, spending. But what they noticed is that it had, it was not, it was quite, larger. So they just asked them to reduce the spend. They did not give any precise target. They did not, really, implement new processes. So one one of the things that happened is that there were, for instance, business units that stopped altogether, or or seeing, dinners, doing off-site activities, team, team, activities. And for the others, it was just, okay. Let's maybe reduce the budget by 20%, thirty %. And this is what we mean when we are saying, implement a clear shared company wide policy. It must be very clear what you are, aiming, to do. Or are you going are you do you want to remove specific expenses maybe just for three months, for six months, just in order to, ensure that you don't have too many cash outflows? Do you want to, or just to, reduce a little bit those, those expenses? So that's the first, the first, part. While communicating also the why. And this is why where, sorry, cash culture is, super, important, because it helps people understand, what's, what is the challenge that you are, trying to solve, here, and the reason why behind the the spending freeze that you are trying to protect job, protect the liquidity of, the company, and that is something that, that should matter to, to them. Second point, implement a multilevel validation circuit. What we see, more, more often than not is that, for instance, if the expense is more than £500, then it's going to have to be approved by, let's say, your team lead above maybe a a director and above a certain threshold than the CFO, maybe, even the the CEO. Here, what we also wanted to share is that, usually, this is where you will see a rock spending, especially if there is not a clear, shared company wide policy. People really don't understand why, the company is trying to rein in spending. So work spending, one of the ways it happens is that we, we implement you implement in your company, a threshold saying, okay. All expenses that are above five k, they must be approved, for instance, by the by the CFO. So what we are seeing, and these are our customer stories, is in the companies, people are going to ask for, the quotes. Say the quote is, £25,000, then they are going to, ask the the supplier to divide the quote into three different quotes that are going each of them is going to be below £10,000. That way, they, don't have to, get the CFO approval. There can there there can be actually two reason why they would do this. The first one is that the process is so manual behind it that getting the the approval of the the manager that is, supposed supposed to, approve this, takes ages, and they have to move, fast. So they are doing this not because they, they want to, to, to to kind of, do this rogue spending, but because, the process is here, behind is a little bit, broken. That's the first part. The second part is that they don't really care about the company, the new, spending policy. They disagree with it, and they are not going to, they don't want to abide by the new, the new budget, for good or bad, reasons again. So that's the reason why it's, that's a sore point. The tools that you are going to use are going to help you, make sure that, you can rein in a whole spending also with, with this by setting budgets per team, per cost center, by maybe adding, cards that you are going to be able to, deactivate upon a certain threshold. And what is super important is to then monitor and report the spend deviations. I think you may have seen it. Now you can generate fake receipts with, GBT, meaning it's even, easier to, to generate those, those, fake, receipts. And at the same time, it's even easier in, in a context where, cash constraint, and the volatility is, is increasing. So that's, I would say, the worst possible timing, for this. When in this particular area of the financing, we see still a lot of manual processes, receipts that are still being handled in paper manually, checks that are done on, on Excel, on some receipts only. That's That's the reason why, and I just wanted to share this with you because even if your customer is really, really new, at Agicap, we've developed, the the tool that helps you check the the the receipts, and see if they have effect with the with the AI. Last but not the least, whenever you are, if you are noticing a deviation from what you, from the budget, and I mean actual deviation, meaning that the, the expense is already, engaged, it's extremely important to then inform, of course, the the colleagues, in the in the treasury, team so that they can take that into account in their scenarios and then that you can, reflect on, why this, this happened and, maybe change the the processes, adapt the the tool. One of the ways that you can, do this is by tracking those, KPIs. So the, the, for instance, the the recurring leaks in the policy application, either the number of those leaks and logs spending or the percentage or the the amount. And to try to reuse this, this is also a good KPI to, understand the ROI that you have from, getting a better spend control. Last but not the least, the some key learnings that we, we received from, from finance team is that what matters the most is that it's super important to create accountability, within the teams, regarding the budget, regarding the company policy, the spending policy. This is really where the cash culture helps in, sharing the those objectives, shaping this, accountability culture when it comes to cash flow management. Because even if there you have a treasurer in, in your company, it's a heavily decentralized process. It's multiple decisions that are taken on a daily basis by people that are outside of the finance team that ultimately are going to have, the most impact on the the cash flow at the end of the period that you are that you are looking for. So that's why cash culture is here, extremely, important in order to weather those, those storm and to reduce spend. This spend management, in, especially in crisis situation is really all about clarity and consistency and control. So this is the reason why processes usually need to be adapted whether or not you are already using a spend management tool. And then, again, we said the same thing for, for scenarios. We said the same thing for customer journey. Smooth collaboration is essential if you want to drive, return on investment for your spend management policy, your spend management, tool. Smooth collaboration between the finance team, the manager, the manager, the operational managers, HR in some instances, purchasing, all the different, departments of, the company. This is really where you, you will see an alpha in the way you are handling your, your cash flow. So that's, what we wanted to, to share, in terms of advices on how to rein in a rogue spending. Thanks, Bruno, for completing, the set of three examples, on how you guys as, as finance, people can react to this volatile environment. I think we now open the floor to some questions. For those of you who want to learn more about Agicap, if you hadn't already seen it, there is also a request in Agicap demo button, top right hand corner, to dig into any of the examples. I think there's a form where you can say, which bit you're most interested in seeing. And if you have any questions, now is the time. Please put them in the chat, or in the q and a section on the far right of the screen. Either myself or Benoit will pick them up. Everyone's reshaping their straps cheap and all. No time for questions? No time for questions. No. In any case, if you don't have any, any questions, I hope we hope that, you found some, useful tips, in the presentation that we've, just, shared today. We'll wait a couple a couple of minutes longer, but then, if there are no questions, let me say thank you for joining this webinar. As it's, as Benoit said, I hope it was useful. Hope you can take, some tips, from the examples Benoit shared on how to, respond to this environment, for your own businesses. And hopefully, see you at another Agicap webinar very, very soon. Thanks very much, everyone. Thanks a lot, and Have a good day. Have a very nice day. Bye.