Cash management in times of crisis: the case of consulting firms
Interview with Paul Trévillot, CFO at Wemanity
Paris, 15 December 2020.
The economic crisis linked to COVID-19 has not spared the consulting firms, which have also been affected by a weakened economy. Thus, the drop in activity is reflected in a lack of budget.
According to Paul Trévillot, CFO at Wemanity, lack of budget can be prevented in 3 steps:
How have you got through the last 5 months? What were the main aspects you had to focus your attention on?
"We are a consulting company. Our main focus was on how to secure our company's cash, under 3 axes in the following order of importance:
- To ensure the smooth running of the "Cash Order" cycle with our customers.
We were afraid that clients would no longer be able to pay our fees because of the crisis, so we set up a Task Force on the collection of client receivables and the collection of outstanding contracts.
- Securing our group's cash by validating financial agreements with our bank, as we have made virtually no use of short-time working.
- The state aid from which we could benefit.
These 3 axes have so far enabled us to manage this particular period. »
On a human level, Paul Trévillot points out that awareness raising and support are necessary, even indispensable, for the smooth running of the company.
What have you put in place to manage the crisis and the post-crisis period?
"We are fortunate to have been able to dedicate a team to this period of crisis, and we already had processes in place for monitoring and cash management. We have just made our operational teams even more aware of the cash aspect, and we are doing more sustained cash and business monitoring, with weekly rather than monthly monitoring.
This upstream work has therefore enabled us to save time and to focus on the follow-up of the collection of trade receivables. »
Treasurers, "company doctors".
As in every crisis, the finance functions are under severe strain and are doing their utmost to get out of it. Today, treasurers and accountants are referred to as "saviours" or "company doctors*". These "saviours" are recognised by most, but according to Wemanity's CFO, they are not sufficiently in the spotlight:
How do you assess the treasury function, what are the challenges of tomorrow?
"With everything that is happening at the moment, the treasury function needs to be put even more at the centre of the company's systems. It will be necessary to anticipate more and more and have more visibility on cash, to follow it like milk on the stove.
It will be necessary to do a lot of risk monitoring, which is essential for the smooth running of your business. »
Like Paul Trévillot, follow your financial flows with your banks, your trade receivables but also your WCR in a clear and optimised way with our Cashlab tool.
* Based on an interview with Pascal Castaner on actu.fr, Chartered Accountant and candidate for the regional presidency of the Montpellier Order of Chartered Accountants.