#6 Unifiedpost Group & element61 about streamlining the consolidation and reporting process

Speaker A: Welcome to Finance Innovation Insiders, the insider's guide into digital transformation. It is brought to you by CCH Tagetic, the corporate performance management software from Walters Kluver. In this episode we invited Laurent Marcelis, CFO of Unified Postgroup. That's the leading digital one stop shop solution for administrative, financial and payment processes and communication between parties. He's joined by Bjorn van damme from element 61. We'll discuss consolidation and reporting in a fast growing international business. Welcome to the both of you. Let's start with introductions. Um, Laura, can you tell us about Unified Post and your role there?

Speaker B: Yes, uh, thank you. I'm indeed Laurent. Laurent Marcelis, CFO of Unified uh Post Group Quickly explaining on Unified Post. Unified Post is a company that was originally founded in belgium back in 2001 with uh, the idea to optimize communication between companies. As you probably know companies are sharing a lot of information with uh, one another going uh, probably from an order or a request, uh, hopefully to a delivery of products and goods. And linked to that are a lot of documents like uh, orders, invoices, uh, credit notes, uh, uh, confirmation, uh, notes and all those things. And Unified Post created a digital cloud based platform to help companies to uh, become more efficient in their communication with their suppliers and with their customers. And that's the real goal of Unified Post. Um, myself I joined Unified Post a couple of years after it was founded back in 2005. We had a long journey uh building the company. We started just with uh, a few people, uh very enthusiastic people. Um today we are a company of approximately 200 million turnover. We uh, realize a turnover with 1500 people and uh, started in Belgium but uh today active uh all over Europe. I can say we're active in 32 countries, always with local teams building on a general cloud based platform. Um, first years at Unified Post of course small company, Um, I was uh, more general manager than specific, uh uh CFO as from 2017 I became CFO of the group to prepare the growth uh because we are a high growth company. Specific. In the last uh five years um, did some funding rounds, went public with the company. We are now listed on the stock exchange in Brussels Euronext, uh Brussels and we are still building uh our business today. Uh we hope we can further expand it to a lot of businesses in Europe and become uh, with Unified Post one of the dominant players in our domain.

Speaker A: That all sounds very impressive. Let's zoom into that growth in a bit. But first I'd like to hear from Bjorn. Bjorn, can you give us a short description of element 61 and your position in the company.

Speaker C: Sure. So element 61 is a Belgium based business analytics, performance management and data science company. We are about close to 100 consultants strong uh in those three domains. Myself I am leading since the 1st of January uh this year 2021 the CCH Tagetic Competence Centers. I took over from my colleague Frank Lehoek who was involved prior to that uh, and prior to that I was involved in uh the competence centers next to uh, CCH Tage a little bit in the same landscape but other technologies.

Speaker A: Now Laurent, let's get back to that. International growth for Unified Post. What are the underlying factors there? What's driving this growth?

Speaker B: So actually uh, the growth path we are following with Unified Post, uh, it's really a strategic decision. What is currently happening all over Europe is that governments uh are making B2B invoicing mandatory digital. Uh today it is still a bit of paper, uh, a lot of PDF invoices, uh sent from company A to company B and what is expected. And Italy was the first country to implement it in Europe. The mandatory B2B E invoicing. But it's the market expectation that between 2020 and 2030 all European, at least the countries in the European Union, will evolve to a mandatory digital invoicing. And that created such a great opportunity for uh Unified Post and the business of Unified Post that we wanted uh, to prepare ourselves to make the jump from a local Benelux player, uh, which we still were actually in 2000, 2017 to becoming a full European company. And so we uh, we expanded our business. We did that organically uh by further growing the company and the business but uh, also with a very uh specified uh M and a strategy. We, we bought companies, we did part of the consolidation in our sector um in Europe only last year we closed uh six acquisitions and the years before that also several acquisitions building um the company to where we are today, where now we are already in 32 countries. So whenever, for example France will be one of the first to follow the uh, example of Italy. France will make the E invoicing mandatory as from 2024. And that means that all businesses in France will need a good solution not only for the uh, financial supply chain and the financial documents, but also for the interaction with the tax authority because tax authorities want real time information about your financial flows. And this is really the wave we are surfing, uh, helped by government regulation making digital uh way of working mandatory. And hey, here we are making uh, uh with our offer to help companies throughout Europe, from the smallest ones because we can work for the smallest SME up to the largest corporate, we can help them becoming full digital in their financial administration.

Speaker A: That's very fascinating. So along the way you went from a private business to a public company. I'm curious, in what way did that change the character of the company?

Speaker B: Well, it's a lot more stringent of course. And then as we are a bit talking about uh, financial reporting here, I will focus on the financial reporting. Um, is when you are a private company, there's always a bit of room for errors. Hopefully not, but okay. Corrections are possible. Um, if you miss ah, a uh, deadline that's of course not okay. But for a private company it can be explained once you are on the public market and you need to publish your figures when you have told it to the market, you publish every year your financial calendar and then you need to respect those dates. It is absolutely horrible. Uh, if you miss the date of publication of your financial results, that's really a not, uh, no go. The second thing of course is that you need to be able to publish your financial results as soon as, as possible. Um, the financial market is really looking at that because the sooner you can publish your financial figures, um, it is an indication that you are uh, managing well your uh, financial reporting and financial communication within the company and to uh, the outer world. And that gives also a good impression for the management. So if you are late reporting your financial results, even following the date, but if you do it too late, then um, it is a sign that you do not manage your financial processes in the proper way internally in the company. Second thing is once you have published financial figures, they need to be final. Uh, there is no room for mistakes, uh, in the public world. You will be punished if you need to uh, uh, do corrections. So uh, that is really a game changer for a finance team. Fixed dates, um, with uh, a lot of stress. And the sooner you can publish, uh, the better. And once you have published, you need to be sure that what you publish the financial figures are always uh, correct. Uh, to the outside world.

Speaker A: Yeah, for sure. But where in that process became the need for a dedicated tool for consolidation and reporting, obviously.

Speaker B: Well, actually we knew that for already a couple of years. Um, but like I suppose in many organizations, uh, we have lots of things to do and we were growing our business so fast that it was difficult to choose which uh, project or which improvement or which tool needed to be implemented first. Um, if I take a couple of step back, 2016, 2017, we implemented group wide and ERP system. Um, so that was already a first good step. But of course with the acquisition strategy, the M and A strategy we have, um, I very quickly made the analysis that for financial reporting we cannot rely on the ERP or accounting software we use for the group because there are always some acquisitions that run on other software that run on other tools. So we really needed to streamline a good consolidation and reporting process, which uh, we did for a long time actually in an Excel sheet, uh, uh, uh, a data book where we uh, consolidated and did our reporting. Uh, of course very clear to everyone that uh, working in Excel is very error prone. Ah, it's uh, easy to make a small mistake with a large impact. Um, and of course also very time consuming. The tool is not really helping yourself. But that was our old way of working and we realized that with the growing number of legal entities within the group, Unified Post today has 880 legal entities, which is a lot. Uh, well to my opinion, for us it's a lot. I know there are companies out there with a multiple on legal entities, but for us 80 was uh, a lot. But in the meantime we were also um, implementing ERPs, doing acquisitions, uh, bringing the acquired companies, uh, to our finance, uh, uh, platform way of working, finance organization. So we had to choose. And in the meantime we also did an ipo. So we did a bit the other way around. Um, um, normally you would first I think implement a good consolidation and reporting tool and then go public. Um, but for reasons that we wanted to move forward with uh, the business, uh quickly. We first did our ipo. And at ipo, I must say, ah, we were still using uh, the data book consolidation, uh, which uh, then after IPO we realized, well we realized it before but after IPO it became really the priority to change that with a good tool so that we can better uh, rely on the financial figures we report. That was really uh, what we needed.

Speaker A: Laurent, what made you choose element 61 as your guide in that implementation process?

Speaker B: Well, we have known element 61 for uh, quite some time. Uh, we know some of the people uh, working there. Um, we are also familiar with the work they did for other Belgium companies. So for us also being originally and still headquartered in Belgium, uh, a Belgian company, I think, uh, element 61 is one of the best players here in Belgium to do such an implementation. And the reason we have chosen for them is that they combined for us two things. Um, and that was really the excellent match. Like I told, uh, at Unified Post with the high growth figures we Always have so many things to do that we uh, always are uh, in shortage of time uh for projects. And element61 we knew, and that was also the prime reason why we have chosen them is that they do not only come with some technical competence of the tool but they have really good financial people also that know everything about accounting and reporting and consolidation. And that was. And really we said to them um yeah guys you will need to work, you will need to run this project in a very difficult way because our internal people um, don't have the time that probably you want them to spend on the project. So you will need to do a bit more than you typically do uh for other customers. And we knew they could do that. And that was really uh the reason we have chosen for them and the reason they have done it also afterwards was uh the key to success for this project. It's really them guiding us. They were really leading the project. We provided them information and they were leading it from um, both perspective of the tool CCH Tagetic, uh but also from financial processes uh for making one uh, chart of accounts for example for the group that were still things to be done when we kicked off this project and they really went into the detail of uh, all financial processes and financial reporting within Unified Post.

Speaker A: Well Bjorn, that sounds like a challenging project to take on. No?

Speaker C: Well in fact this is not something that just stands out as a unique uh question. We differentiate ourselves in the market uh by actually giving that extra layer of advice and uh competence. So next to the uh configuration of the CCH ticketing tool we also provide best practices in all those financial uh closing processes and you actually try to be part of the internal team so you actually run into a coaching mode uh where gradually you configure the solution and you can actually um, educate the team more and more uh by working with the tool itself. So you really have to see it as a combination of technical uh expertise. But also content is very important. All our members of our uh performance management team, they have all uh experience in finance positions. So we come from the finance world, we can speak the language. We actually took our time to really get to a very high level of understanding and knowing how the CCH Daggetic tool works prior to really going full into the market. Uh that's why we don't have like one hundreds of clients. Uh now we are actually coming there but our let's say main focus is that financial expertise together with that uh tool knowledge. I think there we can really uh guide as Laurent said, guide the client into the project and on the other side on the client side we have to have a knowledgeable team like a uh team that is really willing to adopt the tool and we really found that uh, in the team of Laurent. So we're actually also doing that today even that we have delivered the solution but today we still act as a coach uh and we see a very dedicated team that is really very far now in the adoption of uh, the

Speaker A: tool and what makes uh CCH Tagetic the right tool for this job.

Speaker C: For me the CCH Tag Ethic tool is a very holistic tool. It supports the uh financial close activities but next to that it also supports uh budget forecast, long term planning which might be on the radar of Laurent for the next uh projects to come. Also it will provide a finance team disclosure management options if they want to go there. So it's really, it's a platform, it's not just a tool solving one challenge. It's a platform where as a CFO and with your team you can hook up with several of these let's say applications. The more that you are evolving as a company. That's for me a very crucial aspect of the tool.

Speaker B: Perhaps if I can comment also the way we selected cchetic is ah, we did that together with element 60 uh 1 uh because we needed to move forward fast. That's of course uh, we do not have time to waste. Um, so, so based on a couple of workshops uh with them and with them being the specialist on the market. Normally when you do a tool selection you go from a long list to a short list and then you have demos and workshops and you spend a lot of time and a lot of reports and then in the end you choose your tool. Um here we took a shortcut where in discussions with element61 we said that's, that's what we need and what we are looking for as uh a tool. And based on their knowledge they said okay in your case, uh, the case of Unified Post to our uh opinion cchetec will be the best tool. And why is that? It's exactly like uh Bjorn explained. We were looking for a tool in the first place for consolidation and reporting. Uh, a tool that can be, that is, that is flexible, that runs in the cloud, that can be operated by internal people, that is fast, that is uh, not too difficult uh to use and the tool matches in all those uh criteria. And of course also there's a lot of functionality in there, the forecasting, the budgeting which is uh of course very important for us to uh, report to the business, to the management team, to the board of directors that we always compare with. What did we do comparing to uh, what was budgeted or what was forecast. Where are we as a company? And that functionality is in the core of cch, the jetic. It's all in there. And what is helping us with the process we defined is that it's not only about purely financial reporting, but we also implemented uh, uh, in the same tool, the management reporting, which is based on the same financial figures. So the business and the management of the business are looking at the same financial data as finance people, but they have their management reports, uh, now very quickly, uh, on our finance data where they are much better informed. Informed about how they're performing, how their team is performing and those things based, uh, on the same data. The complete picture makes it today a very good choice uh, for us as a company in uh, all aspects I've mentioned.

Speaker A: I'm guessing it might be too early for a uh, full evaluation. But can you tell us about the results so far?

Speaker B: Well, you should talk to our auditor in the audit committee where we finally switched from a consolidation process using Excel to cch, uh, syediq. It was really our auditor said well finally we are there. The process is now under control. Control. The quality of the process is so much better. Um, the possibility to make mistakes, uh, is so much reduced. That summarizes it all with what we did with uh, uh, uh, the tool. Better quality of data, better um, quality of reporting, reporting for finance and the external world, reporting for the management. And that in a very controlled way. And uh, that's for us the achievement we did, but also the flexibility. Let's not forget that we did six acquisitions and not all of the acquisitions are today on our ERP system. So it's really an essential tool. And Unified Post also in the future, not uh, today, but in the further future we might do additional acquisitions. So we are now always in a good shape that uh, if we acquire a company that we can uh, adapt our reporting and include the acquired business in a very short time frame. Let's not forget that we need to report to the market four times a year, every quarter. So if you do an acquisition, then you need to include uh, the acquired business, uh, just in a couple of weeks or a couple of months time. And that's essential when I look at it today. Also very proud of the Unified Post team because we're talking about element 61 and indeed, uh, they did a very good job. But uh, um, I also need to mention the team uh, we have built internally knowledge was transferred to the internal team and I think they're now almost independent uh, with uh, some good advice. But we build the competences rather quickly. They really can work their way out with the tool, uh, do a very good job. So that went also smoothly. Transferring it to really an internal consolidation and reporting team that has really embraced the new way of working.

Speaker A: And that's something that's crucial for you Bjorn, right? That you have that team within the company to collaborate with.

Speaker C: The collaboration went fine I think uh, the growing team uh, of Laurent, we were able to transfer that knowledge, that very critical knowledge to be able to adopt the system uh, relatively fast. It's an ongoing process. In the beginning it was more like we're going to take away some of the headaches that they have. Are we going to start with the team? And we were actually consolidating ourselves together with the team and then gradually we just transferred uh, all that knowledge to uh, the team who absorbed it very very well. So for us the collaboration was really fine. And that's exactly what we are looking for in these projects. It's difficult when you have on the other side just one person, maybe two because this person has a day to day job in finance and sometimes doesn't have enough time to dedicate to that project. And that's really crucial. And you see how crucial it is they were able to dedicate time. Each of them had a good clear task in the project uh, as we were moving on. And that's why uh, they are not able to be uh, uh, self dependent uh, uh, within the tool. And that's really important in these projects that you have team members at the client side who are able to dedicate their time let's say to support a project like this because it's not a small project.

Speaker B: Now if I can jump in on that question and add some anecdotes of what we did and actually I think we kicked off the project late uh 2020. And just to give you an idea what we needed to handle that was just after the IPO, the Unified Post Group went public in uh September 2020. So just after that uh, we uh, started a process project for uh, consolidation and reporting tool, started our um, collaboration with element61 November December 20, uh, 20 and then um, uh, I can still remember I needed to go out to the team of element 61 beginning of January. So just after one month informing them, ah yeah guys, by the way, we have done three acquisitions now beginning of January. So you need to Include those on also in your work. So that was uh, a bit of a change of scope of the project. Another three big companies uh, that we acquired that needed to be included uh, in the processes. And just for the fun, we repeated that again in April. So three months later, yet again I went back to the elements and our own team of course, uh, saying them again we bought another three companies so they also need to be included in the consolidation and reporting process. So that was really the start which, which was really hectic where every time you thought we, we have a plan, we have a planning, we know what to do. Then on top of that came another three companies. So we needed to rethink uh, and reorganize and replan. Like I said, in the end um, everyone delivered a great job, uh, our internal people, people of element 61. And if you see now how the tool operates, it's really helping us in a day to day business.

Speaker C: Just adding to that, as Laurent mentioned, uh, they acquired six companies last year. So you want to have a roadbook, you want to have a playbook ready when new companies are being acquired. And I think now that uh, the team is able to do that internally and the system Cchetti is as well capable of managing all that scope ins and maybe later all scope outs or maybe mergers. So that's very important uh, for the team actually to have that comfort that the tool is configured well and that can cope with all those changes.

Speaker A: Bjorn, when you jump into a project like this, how do you feel when your job is finished? When is the project done?

Speaker C: For us the project is done if we feel um, we notice that the client is able to uh, process uh, the monthly closing uh themselves and that's where we are now. Sometimes there are very small uh, questions but that's not that often anymore. So for me a project is finished if the client can say we are uh, we feel comfortable in working with the tool and we are okay, we are now uh, self supporting. That also typically when we start to say okay now you are independent, we are going to leave you for that particular project. But as I said, Turketiq is a platform so always willing to uh, advise on new processes if they come in play.

Speaker A: Well speaking about that Laurent, um, what is still missing for Unified Post? What are um, the next steps you want to take?

Speaker B: Um, I think for us the next step, um, one thing I want to realize is that I want um, full management reporting really on the desktop of uh, every one of the management team within Unified Post. The way we are working today with our management reporting is that is still we provide them from the finance team. Ah, we provide them the, the reports so that they can see um, how the business is running. We do together with them the budgeting and the forecasting. We input that in CCH Synergetic so we can compare it. Um, for us the next step is really that uh, every manager on his laptop, on his computer can look at the financial figures, uh, drill down, make some analysis themselves that they can play around with the figure figures. And that is not something we have um, in place uh, today and that is uh, once we are fully uh, in control of the processes uh, we implemented here. I think that's the next step. We will uh, define uh, to set

Speaker A: that up and I imagine element 61 will still be your preferred partner along the way. Um, if you can say so now of course.

Speaker B: Well that's logical and obvious. Of course that's not even a question uh for us anymore because we are uh, now so linked to one another. What is also good about element61 here in this call? Ah, Bjorn is present. There's a whole team@element61 so they have uh, a lot of competent people. And so whenever we have a question, if Bjorn is on holiday next week, week and we do not need to worry, uh, will there be someone who can uh, who can handle our questions? And they have a very broad team which is uh, which is helpful. They have a team that uh, that is more focusing on financial uh, reporting. They have a team which is more focusing on management reporting. So they have all competencies in house and even beyond that. So yeah, I was so pleased with um. Well I can't say this probably because I need to negotiate on the price but um, I was so pleased with the collaboration that it's a no brainer to continue with element 61 but don't tell them because I still want a good price for their services. No problem.

Speaker C: But adding to what Laurent is saying, um, in that performance management competence uh, center and especially in financial reporting we have team members with quite some, with quite some years of experience and that's exactly where we want to differentiate ourselves. I'm not saying that we are not hiring or adding uh, juniors, but let's say the core is senior people with quite some years in finance behind them. And that's our strength and that's our comfort as well, uh, for our client to show that we talk your language. So that's really important for us.

Speaker A: You're talking about strengths, but what's your biggest challenge then? Are There any real stumbling blocks?

Speaker C: Well today finance is of course much more data oriented than it was before. Uh so the challenge is more in the quality of the data. So going back to the source is important. Sources have to be clean, have to be okay, have to be correct. That's why an ERP system is very crucial because that's where you're going to get the data. So you have to get that data into the uh, system well structured and make sure that the quality is there, that it's checked. So that's actually the main challenge. The challenge is in the quality of data. Apart from that it's uh, been there, done that. Why? Because we have the experience. I mean uh, we have other companies which are quoted, which are on the stock exchange. Uh, so we have that experience and we feel really comfortable in uh, making sure that those projects become a success. Uh so if there is a challenge, the challenge is always uh, one on the uh, people side. Because people have to have time. Our client needs to be with us. We will not do a project when the client has no time. That's definitely not a good way to go. And second it's data quality. We stress that very often um, in the project data quality is key. So that's why we would most of the time also say look, we are not going to solve that in the system, we're going to solve that in the source system and in the source system. Solving something in the source system by the sources, that's always very important.

Speaker B: Looking back, what was also very special about our project, we started the project 2020 so as everyone will remember that was uh, the COVID period. Uh so we worked together with element 61 on the implementation and we hardly ever met uh, physically uh, because the full country uh, was in lockdown, we could not uh, drive around. So it was a virtual kickoff and virtual meetings and meetings online, uh, which is a new way of working but ah, quite different I think to probably what happened in the past where there are a lot of workshops and people in a meeting room discussing on topics this, this was uh, full virtual. And I think in, in such a case what Bjorn is mentioning, it's, it's why I think of it. What Bjorn is mentioning is even more important that you really understand one another uh, what uh, what you're saying. Um, and without that really in depth financial background of the element 611 team, it would have been very hard to take this project to the virtual world. Because of course internally we have financial specialists but they have the jargon, they know what a consolidation is about. But of course they're not a specialist in tools and how you need to implement it and what you need to do to implement it. So, um, they will provide the information. And I think it is even more important if you do a virtual project that, um, on the other side, there is someone who understands very easily what you are saying and what you mean with it.

Speaker A: Yeah. All right. I think we had a lengthy but very interesting conversation. Thanks a lot for your stories and your time. Of course.

Speaker B: Thank you very much. Uh, and all the best.

Speaker C: Thank you very much.

Speaker A: Finance Innovation Insiders is a podcast by cch the getic, the corporate performance management software from Wolters Kluhr, made in co production with Chase Creative and Labor. Thanks for listening and, um, thanks again to our guests Laura Marcia and Bjorn Van Damme. My name is Mae Van Wallachem. Um, and that concludes this run of episodes. You can be one of the first to find out about new ones by following us in your favorite podcast app. See you soon.