In this episode, Manager of Credit, Accounts Payable & Accounts Receivable at Peavey Industries, Mary Masson Hummel discusses the impact of inflation, the push-pull relationship between AR and AP and the direct correlation of technology efficiencies on cash flow, the customer experience and employee retention.
In this episode, Manager of Credit, Accounts Payable & Accounts Receivable at Peavey Industries, Mary Masson Hummel discusses the impact of inflation, the push-pull relationship between AR and AP and the direct correlation of technology efficiencies on cash flow, the customer experience and employee retention.
Welcome to Finance to Futurist, a Sidetrade podcast series on how innovation data and AI are disrupting order-to- cash.
Natalie Silverman:Hi, this is Natalie Silverman for Sidetrade. Welcome to Finance to Futurist. On today's episode, we're discussing the impact of inflation, the push pull relationship between AR and AP and the direct correlation of technology efficiencies on cash flow, the customer experience and employee retention. Please welcome Manager of Credit, Accounts Payable and Accounts Receivable at Peavey Industries, Mary Masson Hummel. Good morning, Mary, and thanks for sitting down for Finance to Futurist.
Mary Masson Hummel:Good morning. Thanks for having me, Natalie.
Natalie Silverman:It's so great to see you, and we were at a conference together up in Banff. And I was lucky enough to meet Mary, and you had so many interesting things to say. So I'm really glad you're able to join us today.
Mary Masson Hummel:Oh, perfect. I'm happy to do it.
Natalie Silverman:All right. So again, I always start off with a very easy question. So we take it easy, and then we'll we'll get progressively harder. Just would love to hear more about yourself and your background and how you got to where you are today.
Mary Masson Hummel:Okay, sure. So today, I work for Peavey Industries in Red Deer, Alberta, and been here for a little over two years, but I've been in banking, finance, oil and gas primarily in credit AP functions for a little over 20 years now. So kind of grown throughout my experiences and different organizations. And so yeah, I'm so happy to be at Peavey learning a lot. It's my first time in a in a retail environment, and certainly lots to learn here.
Natalie Silverman:What I'd love to talk more about is what you and I spoke a little bit about in person. But you know, there's been so many changes in the credit industry, and certainly in receivables and payables. And I'm sure you've seen it all. But what are the top challenges that you're facing and accounts receivable today? And what keeps you up at night?
Mary Masson Hummel:Hmm, good question. So, there's many things going on in the economy today that, you know, we're trying to be, you know, a couple of steps ahead of, you know, one is increasing prices, ensuring that our customers can handle those and that we're watching their every move to make sure that you know, if there's a flag present, that we're picking up on it to ensure that our accounts receivable is protected. So we're always wondering about that, like, how do we do that. And then, of course, we are always trying to maintain our accounts against fraud. So always trying to be on the lookout for that, you know, there's all kinds of scams going on out there about bank accounts, switching bank accounts, and, you know, trying to get by us with that. So we are always on the lookout for stuff like that, and make sure that we have processes in place to protect our assets.
Natalie Silverman:How about inflation? I know that's on the mind of most financial people right now. But what are you guys thinking about in terms of inflation?
Mary Masson Hummel:So you know, inflation is causing many issues for us. And the biggest one for us would be, you know, cost of, of merchandise and supply chain. And freigh. Freight is a big one for us. And not just us, but many, many suppliers and ensuring that, you know, we can get a product out to our customers and ensure that, you know, they can afford it, and then they can sell it at a margin that show that they can keep their business running.
Natalie Silverman:Yeah, it's just something that we're hearing more and more that really, the CFO is so focused on that. And so, you know, from a receivables point of view, I know that we're trying to help, you know, conserve your cash. Right. So my next question for you being a veteran of the industry, and certainly I know, you've seen a lot from both a credit and collections perspective. How has the role of the credit and collections manager evolved?
Mary Masson Hummel:When I first started in in AR, you typically were in touch with your customers, customers knew you knew their paying habits, and you knew what to expect, you know, always there to help regardless if they were in a position that that they couldn't pay, you worked with them. And we still do today, because there's still a customer, and we have to make sure that, that they continue to be a customer. But, you know, some of the things that have evolved, or through technology, sometimes good, sometimes bad, you know, social media, all kinds of different avenues have impacted the business like said some good, some bad. And again, fraudsters are out there, you know, looking to impact the businesses, whether it's on our customer side are on our side, and just technology, trying to make sure that we can gather information on our customers, like I said, trying to find patterns, you know, if there's a problem detecting that ahead of time, you know, just stuff like that is, you know, top of mind for us, and how do we get better? How do we get more efficient so that we're not, you know, using spreadsheets all the time to to maintain our customer base and that we have systems that are efficient, and giving us the data that we're looking for.
Natalie Silverman:That's a great segue because my next question for you was going to be about how does data and technology fit into your strategic vision and actually enable your teams, because, you know, we talk a lot about technology can sometimes replace people. But then on the other end, you and I talked about this, it also is a way to make them more efficient, as you just said.
Mary Masson Hummel:We're constantly looking at new ways to make our lives better, like as an organization with technology. And, you know, we're looking at a new ERP system over the next couple of years, to give us better data, so that we're not constantly relying on Power BI reports, or spreadsheets and different data points. Because, you know, if I'm looking for a Power BI report and somebody else's, and we're pulling somewhat of the same data, are we really getting one source of truth, and that that is the most important thing for us is one source of truth, make sure those numbers are accurate. And then we're all talking about the same numbers, not different versions. So very, very important for us looking at a CMR product, to help make our lives better as well, like from a tracking perspective, and processes are constantly evolving, trying to find better ways of making things more efficient. It doesn't mean replacing people, it means taking our current workforce, and being able to expand with their tasks, you know, for more value add, and using some of the other products like AI to help with those tasks that can be done, you know, with without a whole lot of human intervention.
Natalie Silverman:Do you think technology actually helps with employee retention?
Mary Masson Hummel:Yeah, I would definitely say for sure. You know, because people want to add value, they want to be able to do their job, and they want to have, you know, the right tools available to them. But when they're constantly being bogged down by tasks that that are not providing that value add and they don't feel like they're being productive. It can be deflating for sure.
Natalie Silverman:Oh, absolutely. But no, I love what you said, it really is a combination. And we've been talking a lot about this idea of finance transformation. My next question, I'm going to ask you what you think about digital transformation, but finance transformation, what we're hearing, it's not just technology, but it's people and process and data, and really the combination of everything that's helping, you know, finance departments transform and evolve. But getting back to digital transformation. I wondered what you think about it? And I guess, you know, is it a buzzword? Is it something that you know, some firms are thinking about? Are you thinking about it in your day to day role? You know, and again, you mentioned AI, so AI kind of falls into that digital transformation. So, in your role, your company, your team? How do you think about digital transformation? And then tools like AI?
Mary Masson Hummel:Yeah, so it is definitely not a buzzword. We are definitely looking at digital transformation. And how do we make our business better with the use of technology and our IT department are very, very good at trying to find new pieces that will enhance our business, you know, whether it's in our store network in our back office network, or finance or merchandising department, it doesn't matter. We're always looking for ways to implement a new digital platform to make our business better help our employees and just, you know, functioning as a better team and a better organization.
Natalie Silverman:That's great to hear. Because, you know, sometimes you hear these terms, right? And then people just say, well, it's great, and in theory, but then when it comes to a day to day activity, or again, how you're getting cash back into your business, so glad to hear that's something you guys are actually thinking about. I'm going to switch gears a little bit. DSO, we know how important it is. And obviously, you know, many businesses tend to measure DSO as one of their KPIs. But when does the clock actually start with DSO? On my last podcast, I talked about an idea called Time to invoice where some companies are actually thinking about DSO starting earlier in the order to cash cycle. So here's a question when does your clock start for DSO?
Mary Masson Hummel:So our clock starts at the time that we actually enter in that invoice. So whether it's a product going out of our warehouse, as soon as that product gets picked, and that invoice gets generated, that's when the clock starts ticking for us. Same thing on the AP side as well. So if we get an invoice from a vendor, and they haven't invoiced us for, you know, a couple of months, the clock starts ticking as soon as we enter that that invoice in so I mean, DSO is very important. We do measure it, we do measure our terms as well, you know, and try to keep within, you know, a balanced term. But yeah, DSO is very, very important to us because our cash is important, and we have to be able to forecast our cash, and whether it's, you know, our dealers or customers paying us and you know, what do we need to pay out you know, to make sure that we're within our terms, and we're getting early pay discounts, you know, so we do try to monitor that and to get as many of those in as we possibly can.
Natalie Silverman:Well, that's great advice, because I really think people are not thinking about DSO the way maybe they should and not realizing that there are so many delays when it comes to invoicing, that sometimes, again, if you wait till the invoice is actually delivered to customers, it's almost too late. You almost need, like you said, to start it at invoice creation. Well, hopefully more people take your advice, because that's what we've been preaching to is that, you know, hey, at the beginning of the cycle, every day that you can reduce certainly will help you, you know, at the end of the cycle, right, from a collections and disputes point of view.
Mary Masson Hummel:Absolutely. Absolutely. And, you know, we have many of those as well, you know, that we're always working on and try to resolve very quickly, because, you know, we want to get paid, and we also want to pay our vendors.
Natalie Silverman:Let me ask you this as a final question, because I know your title is manager of credit on both the accounts payable and the accounts receivable side. So I feel like oftentimes, there's this push pull relationship between AR and AP. And, you know, it seems like those AP complexities are always directly impacting the AR process. And that, you know, receivables seem to be a little bit behind, you know, AP, so I just wondered, how do you manage that push pull relationship between both sides of the house?
Mary Masson Hummel:Yeah. So I do manage both sides. And they are kind of looked at very differently. So when on the AR side, you know, we forecast what we're bringing in on our PODs and checks. And so we look at that, and then we use that to kind of forecast. Okay, what do we need to have going out, but they're, they are very, very separate departments. And, you know, from my perspective, they don't interact a whole lot with with each other. Because we want to make sure our vendors are paid. And we want to make sure that we we collect from our customers as well. So for us not really a whole lot of difference, because we don't kind of merge them together.
Natalie Silverman:Yeah, no, no, of course. Yeah. I think you know, even from the AR side of the house, a lot of times it's it seems like there's more control, right on the AP side. And obviously, it's driven a lot by the customer experience and wanting to maintain relationships with customers, which can often drive how they would like to be paid and what not. So yeah, it just seems like for some reason, AR is a bit behind the curve, I guess, in terms of even automation and some of the areas where AP might have started the trend first.
Mary Masson Hummel:Yes, I would agree with that, for sure, definitely. You know, what I have seen in the past is, AP seems to have a little bit more attention. And then our AR modules, you know, you kind of deal with what you have, and hope for the best sometimes to make sure that that we're getting paid. But definitely AP is a little bit ahead of the curve and in our modules and automation.
Natalie Silverman:Do you have any advice for maybe people starting out in the industry or just kind of getting their foot in the door in credit today? You know, what, what advice would you have for them?
Mary Masson Hummel:So it's kind of a rule that I don't think anybody says, Oh, I really want to be a credit manager, you know, when I'm done school, or I want to work in accounts receivable, I don't think anybody really says that is kind of a thing that you land in and fall in, you know, because you know, somebody or you've worked in an organization and somebody says, hey, you know, what do you think about going into this role? Or in this department? Can you help out? So it's kind of a unique role, for sure. It's not for everybody. But definitely, education certainly does help, you know, any courses that you can take on customer service, accounting, just really understanding the ins and outs of it, because it's not just that role like that finance role impacts a whole organization, and you have to treat it like it's your cash, because it's the organization's cash and you have to protect it. You really do need to understand the business, how your role impacts the business, and what can you do to really add the value for the customer and for the organization and just being up to date and reading and really, you know, listening to things like this, like podcasts, people who who have experienced try to find a mentor, maybe there's lots of information out there. I mean, you can go on LinkedIn and read all kinds of different perspectives from people who have been in the business or read books, like I said, courses, seminars, anything that you can get your hands on to, you know, understand what's changing in the credit and accounts receivable world would definitely help.
Natalie Silverman:Thanks, Mary, for your insights into the future of finance. For Sidetrade, this is Natalie Silverman.
Conclusion:This has been another episode of Finance to Futurist, a Sidetrade podcast series. Make sure you catch every episode by subscribing to our podcast on Sidetrade.com or through your podcast platform of choice. Thanks so much for tuning in. This podcast is brought to you by Sidetrade and is for general information purposes only. All rights reserved.