Skip to content

Personio - Direct/Indirect Bridging - 2025-12-04

Metadata

  • Date: 2025-12-04
  • Company: Personio
  • External Participants: Tom Thorn (Treasury)
  • Palm Participants: Emma
  • Type: Customer Call
  • Domain Areas: Direct and indirect forecasts bridging, Cash forecasting, Variance analysis, Reporting, Scenario Planning
  • Recording: https://tldv.io/app/meetings/693186585d64390013926826

Summary

Context

Customer call with Tom Thorn from Personio to discuss requirements for bridging direct (Palm transactional) forecasts with indirect (FP&A budget) forecasts. Tom wants Palm to become a central "reporting hub" that incorporates FP&A budget data for variance analysis.

Key Discussion Points

  • Three types of variance analysis needed: actuals vs direct forecast, actuals vs FP&A forecast, and forecast vs forecast
  • FP&A uses Adaptive reporting system with two forecast types: static six-monthly budget and rolling monthly forecast (GFC)
  • Tom currently manually splits FP&A monthly numbers into weekly transactional forecasts
  • Categorization for FP&A mapping would be simple: Cash inflows, Payroll, VAT, Everything else
  • WorkDay ERP has more granular data points (cost center, spend category, project) than bank statements can provide

Pain Points

  • T+1 reporting on first day of each month takes hours of manual work
  • Manual categorization and mapping of transactional data to FP&A categories
  • No central hub for all variance analysis - each analysis done differently
  • Difficulty separating payroll and supplier payments from statement data alone
  • Seasonal patterns (e.g., January revenue spike from yearly subscribers) not captured in Palm forecast yet

Feature Requests & Needs

  • Percentage flex capability to adjust forecasts while preserving weekly patterns
  • FP&A budget upload and overlay on Palm forecast views
  • Multiple variance comparison tables: actual vs forecast, forecast vs forecast
  • Visual flagging when Palm forecast significantly differs from FP&A budget
  • Drill-down capability within Palm context to understand variance drivers

Jobs & Desired Outcomes

Job: Validate and adjust transactional forecasts against FP&A budget expectations

Desired Outcomes: - Minimize the time required to produce T+1 monthly cash burn analysis - Reduce the manual effort to reconcile transactional forecasts with FP&A categories - Increase the speed of identifying variances between forecast sources - Minimize the risk of overfunding operational accounts due to forecast gaps

Job: Provide timely feedback to FP&A team on actual cash performance

Desired Outcomes: - Reduce the time to identify and communicate significant variances to stakeholders - Increase the reliability of variance explanations with drill-down context

Domain Insights

  • GFC (Rolling Forecast): Monthly updated forecast more accurate than six-monthly budget
  • Operating vs Non-Operating: FP&A splits cash flows this way, but not replicable from bank statements alone
  • Cash Engine: FP&A revenue model with assumptions and seasonality built in
  • Adaptive: Reporting system used by FP&A team for budget/actual comparisons
  • Treasury categorization simpler than accounting: prefers 4 high-level categories vs detailed GL mapping

Action Items

  • [ ] Tom to provide sample/anonymized FP&A budget format for Palm to understand data shape
  • [ ] Tom to review UniCredit bank statement column request from Janice
  • [ ] Palm to continue developing prototype for FP&A budget comparison views

Notable Quotes

"What I'm aiming to achieve is being able to use the system as like, a true reporting hub." - Tom Thorn

"There's the actual versus direct forecast, there's the actual versus indirect forecast, and then there's the forecast versus forecast. So there's various different variance points." - Tom Thorn

"If there was the opportunity to have like a percentage flex broadly across all of our Palm generated forecast by a percentage... I would like to keep that rationale in there and not just layer on top like a blanket 2 million a week additional." - Tom Thorn

Full Transcript

Introduction

Them: Hi.
Me: Hi.
Them: Emma.
Me: Emma. Hi.
Them: How's it going?
Me: How's it going? It's good. Thank you. How are you? I heard you've been ill.
Them: Yeah.
Me: Yeah.
Them: This first part of the week, Monday and Tuesday. And I've heard it yesterday, actually. Yeah, pretty bad. But on the men now. I'm in the office today. So must be. It's okay. It's just that time of the year, I think. Nothing more, really. How are you doing?
Me: So far, so good.
Them: Okay? Fingers. It's funny. I'm looking at my slack and it's just like, the amount of people who have got their kind of, like, sick emojis on, it's taken down the whole team, really. Anyway.
Me: I understand. It's funny. We're mainly a remote one and we've had a few.
Them: Yeah, I think. I don't know if it's just seems particularly bad this year. I don't know why, but everyone. Yes, it's also personal. Like loads of people I know are pretty ill this year. But anyhow.
Me: Yeah. Hey, I'm gonna start a recording this year.
Them: Looking good. Yep, yep.
Me: It's a bit slow to get started, but, yeah, now I'm just waiting for our turn with.
Them: Sure. Well, hopefully it doesn't come.
Me: Yeah. Yeah, it's coming for us. Oh, man. How things otherwise.
Them: Yeah, good question, Billy, to say the least. So there was some updates, team updates, let's say, towards the end of October, so the kind of reduced on the resourcing front. So I was always kind of an individual contributor, but now that's just had a bit of an impact for the wider team and creating some challenges there operationally. And brought in some. Time since some unexpected time, input, effort, input in certain updates. But I need to manage from my side. So yeah, not the easiest month, but hopefully coming through that now as we get into December, still more to kind of work through for sure. But I'm hoping as we get towards the middle of this month and then into January, things will be a bit clearer. But there's some big project items as well to tick off the list, so it just seems like it's kind of you don't really get a chance to take a breath a little bit at the moment, just a lot more. But, yeah, it always seems to be that way. So yeah.
Me: It's always so hectic also, especially end of year.
Them: Yeah, yeah. I'm in my office. I'm the only finance person. So while everyone's kind of winding down for year end, it's like one of the busiest, busier times of the year for me. So I get a little bit jealous of that, but otherwise. Otherwise I go, how about your side?
Me: It's the. Very busy. Just trying to get a couple of things out before year end.
Them: Yep.
Me: Self serve reporting being one of them.
Them: Y. Ep.
Me: Did we enable it for you yet, like the.
Them: I think I did actually have the catch up with the team this week. I think that when that was on me, I canceled it for this week, but maybe that was on the agenda.
Me: I'm sure.
Them: I know. I've discussed it with Christian and with Janice and Jen various different times. Hopefully I'd be interested to see that.
Me: Super cool. There's. There's nine updates coming and more of a general UI in the app for it, so that would be really interesting to get.
Them: Okay? Very good.
Me: Out.
Them: Yeah.
Me: Yeah. Cool. Shall we dive into the FPNA or the indirect? Indirect bridging stuff?
Them: Yeah. Sure.
Me: So. I would actually love to start out with, like, kind of broad questions that I like to do. And then we'll gradually drill deeper into it together. Is. Is that fair? And then we can also. Stay in whatever nitty gritty that makes more sense.
Them: Yeah. Goes far away.
Me: So the first one would be, what are you actually aiming to achieve? Or if you prefer, what kind of questions are you looking to answer? With this ex.
Them: Yeah. So, essentially, what I'm aiming to achieve is being able to use the system as like, a true reporting hub. So what? There's. There's something that sits out. There's. There's data points at the moment that would sit outside of the system. So it's not based on the automated forecast generation. It's not based on the actuals even, and the integrations that we have with the bank statements. It's really based on actually what sort of the rest of Persona is doing, particularly the FPN 18 when they're building out their own budget and forecasting. And that is would always be a question. So we can have my transactional forecast versus the actuals. And that's a completely valid variance analysis. But then there's another piece of that to say. Okay, now with those actuals, And with this bit of categorization, how do we perform against our budget? And the information that our FP and a team are putting out there. So we have a cash burn, like a total cash burn number. But then underneath that, we have pretty much in line with the categorization. Like the high level subcategories. We want to be able to match those as well. And that, that helps. There's one specific report that helps me with. It's the, the T plus one analysis that I do. When we look at the previous months, there is. Sorry, the previous month's transactions and what. They what they've built up in terms of totals. But then it's also just an ongoing, it will always be an ongoing question like, how are we performing, performing against that budget? Because there should be some form of feedback loop. It helps me with actual specific reporting, but there should be some feedback where, where I can say, in a particular month. Oh, payroll is looking higher this month. Or supplier payments are looking higher this month. Cash inflows are looking down this month. And I can actually feed that back to our.
Me: Okay?
Them: Excuse me, our FP and a team in a quicker, quicker time. Basically, having, having that and having that data. I can do that. I can pull the data out of the system at the moment and do that on a manual basis. But the preference would be if we can have some reference points within the system that we can. Have the. The reporting all sitting in one place, basically.
Me: Gotcha. That makes a lot of sense. One aspect of it then being to immediately, in a sense, its variances between the indirect and direct forecast or. What you're expecting to happen cash wise and see where that deviates meaningfully from the.
Them: Yeah.
Me: Lect or direct budget your fpa budget.
Them: So.
Me: Digging deeper. Is there any. Sorry.
Them: Yeah. No, I was just going to say that what we would usually. Sorry, this. What we would. There's various different. So we've met. What we have in the system at the moment is like an actual versus transactional forecast. Or like direct forecast, let's say. But what you'd also want to see is like a forecast versus forecast. So you could see when, when the. So, for example, if the system is generating my transaction level forecast, I can compare that to the, the indirect forecast, the FBA forecast, and see if there's any big gaps, right? So even at the beginning of the month, I can get an understanding of something's looking wrong and I can plug in or maybe do some analysis on my side or plug in an update. Certain numbers. That will get me towards the FP and a budget and just understand, say for example, there's some really ad hoc or inconsistent payments or receipts that we have. So for a good example would be corporate tax. That can happen on a six monthly basis or even on an annual basis. Anything can happen. Over. You know, we don't necessarily have a true understanding of when it's going to happen, but with, with that, it would be allowed me to kind of highlight a gap potentially and then input a manual forecast into my transaction. So there's things from an operational perspective, funding perspective also, that would support that, so. There's the. Sorry, just to summarize, there's the actual versus direct forecast from the system, there's the actual versus indirect forecast, and then there's the forecast versus for. So there's various different analysis variance points that would help to drive some operational improvements maybe, or just flag some. Some, some gaps, but then also help with some of the reporting. So I guess that's the, the, the use case for having those points in there.
Me: Could I show you a really ugly prototype I built a while.
Them: Yeah, yeah, please. Yeah, sorry.
Me: No, but just curious to see if this. Is somewhat around the need. So in this example, I imagine that these things on top here, these are. Like, please excuse the terminology, but FPNA buckets you have in your FPA budget have, like, these categories. Tax, for example.
Them: Yep. Yep.
Me: You might have payroll, you might have rent, you might have a lot of things. Imagine these buckets have a one to one or one to many mapping to palm categories like your actual cash. So for for the tax for example, that could be different types of tax would impalm. Is it like not saying, this is the final ui, this is exactly how it will be, but conceptually, a a way to sort of. Get what you have in terms of your direct forecast and your actuals from policy and map that towards your high level indirect budget.
Them: Yep.
Me: And then a way to visually and perhaps even in other ways as well, kind of just. Compare. Right? What, what's going on? What did we think was going to happen? What is actually more likely to happen based on the Palm forecast, for example, or things that you've added to the Palm forecast that you know will come up and have that being very easy to spot and identify. Is that, is it close?
Them: Yeah, no, definitely. This is. This is along the right line, I would say. What I think. What would also be Sorry, if you scroll down to the table below, but you're just going to.
Me: Sorry.
Them: Just. Just down in the variance summary.
Me: Oh, yeah.
Them: Okay?
Me: This is super conceptual. So like this cold could be whatever, right? It could be like a very Queen. You're too forecast. It could be variance between the actuals and what we thought was going to happen on the high level.
Them: Yeah. Yeah.
Me: Yeah.
Them: Because I think what would be something like this would be. Yeah, super, super helpful. I think you would probably extend this somewhat further to have, like, maybe a series of tables to cover the various different comparisons. So you'd have like, the. The actual versus forecast as you have actuals versus FPNA forecast. Yeah. But then you might also have a forecast FPNA forecast versus Palm forecast. So you you would have like various different.
Me: Yes. Different combinations of variables. Actually, yeah, that makes a lot of sense.
Them: Exactly. Yeah. Yep.
Me: Cool. And then this is just me playing around with, like, visualizations and stuff. But that's something we can look into more later. I was actually really keen to also. You mentioned operational efficiency.
Them: Yep.
Me: I was talking things like working capital, mainly, or. Yeah.
Them: Yes. Yeah, I think so. For example, if we're looking at here as an example, and we see the Palm forecast in on the week of the 18th of December, Is spiking up quite a bit.
Me: Yes.
Them: Versus our FP and a forecast that might be a. Flag for me to go into the system and just understand what is driving that. So if we have that categorization down below, we have that reference and say, oh, okay, the Palm forecast is expecting a significant payroll payout for whatever reason in. In December. That actually isn't going to happen based on ifbna. Forecast. I can then maybe use that as a trigger to go and investigate a little bit and potentially even input some offsetting forecast. Data like in manual forecast, but to pull that down. So there's various things within our, our FPNA forecast. I don't know how other, you know, other customers are in their maturity of this, this side of things. I'd be interested to know, actually. But our FPNA team is, is quite well built out. And the process there is pretty well built out at this stage where their process and the numbers they come, they have like a rolling monthly forecast, and the numbers that they land on are actually generally pretty accurate, but obviously they're just not spit out on the transactional. Basis. And that's, that's so we, we have like the various categorizations are, are pretty good, but we don't have that to say this amount of supply payment from this bank account, for example. And that's where the, the palm forecasting becomes very, very helpful. But, but that, that's essentially we allow, when I say operation would allow us potentially to make adjustments and just understand where those variances are coming from. So we, when I say operational efficiency, we can potentially. If I was just going by the Palm forecast there, for example, and just trusting that completely, I might over fund an operational bank account and lose out on interest.
Me: Gotcha. 100%. So it can be both way like it could be about it influence the palm forecast.
Them: Yes. Y.
Me: So I think tax is a good example. Right. Would it be.
Them: Ep.
Me: Tax. We have. We have this upload, you know, and this looks so different, the process and where the data and everything looks so different across all our customers.
Them: Be on it. Yeah.
Me: Some actually take a spreadsheet that contains all the known upcoming tax payments. Right. And then the directly and then it should be reflected here already.
Them: Yep. Yep.
Me: Taken into account, and then the gap would be probably minimal.
Them: Yep.
Me: Are you saying? There could also be use cases when you know, for example, you identify the gap and then you might want to take some sort of action.
Them: Yeah. So we. I'm not in that position yet. It's probably something I should be doing and getting towards in terms of my. My kind of weekly monthly usage of the system. But yeah, there's certain ones that we can be confident in. So tax is a good example. I, I. Theoretically, I could upload my VAT payments with the full year, but what, what tends to happen is that we get to a month and those those change. So it could corporate taxes. VAT is pretty consistent, but actually something like corporate taxes could be happening at any point within the year. And the fpa, we have like one budget. We have like a six monthly update process for that. So in December and then in, in Maine each year, June each year, that would be updated. But then we also have this rolling monthly forecast, and that would then be the one I would refer back to. So say, for example. At the beginning of a budget cycle, I upload the or we have the budget figures in there. I would then also be wanting to kind of overlay those a little bit with our gfc. We call it a kind of rolling forecast, which is then more up to date numbers. Let's say so there's various different reference points. I guess the. The point there is that. I guess it flags from an operational perspective if there's any, any, any gap, say, for example. It could be something that's really, really straightforward. So VAT happens is pretty much consistent each month. If there was a big difference between one or two forecasts, it's pretty easy to address. There's other, other things that we have some. Seasonality, for example, in our customer inflows. So so the so. If the Palm forecast is generating, and as it should be relatively stable, cash inflows month on month. Because it doesn't have the historical data from. From previous years yet. And then we see, as expected, a pretty big spike in January, based on our yearly subscribers and the people who pay us yearly. That's something that I'd probably want to input manually. Just. Just to reflect that we're going to be receiving more cash in that month. So there's. There's things that are relatively straightforward and we could upload, but there's other, other items like that, the cash inflows that are. I wouldn't be able to upload a sheet with all of our expected cash inflows, but it's good to have that single. Number as a reference point. That we can, that we can refer to when it, when it comes to this, basically.
Me: Now, I'm getting a little bit nitty gritty with you, but input that manually, let's say, for collection, like revenue.
Them: Yep.
Me: Let's say, for example, this view is a full, like a full entity. When you adjust the cat like the palm forecast, to even accordance with the budget.
Them: Yep.
Me: Would it be like, you know, specific accounts only, for example, and would it, you know.
Them: It would be how.
Me: Be like your team. So now you're here in terms of, like, granular. You could go or what you could do to kind of influence or. Or input that into the forecast.
Them: Yeah. So the. The way I. I guess I would manage it at the moment would be to say, for example, like, if we're looking at January here, And we're expecting the palm forecasters showing collections across the month of, say, 24 million, split evenly 6 million a week. Right? Something like that.
Me: Yep.
Them: But I know from our budgeting. Excuse me.
Me: Don't worry.
Them: Sorry. If our budgeting, we're more up more like 32 million. What I probably then do is add in a manual. Forecast to just flex those numbers. Up by the same amount. Just to. Just. Just to represent that correctly is as I would expect to do it. What would also be super helpful is if there was. A. I think I've made maybe mentioned it in some of my notes before is but if there was the opportunity to have like a percentage flex. Broadly across across all of our palm or excuse me, on the palm generated forecast by a percentage. So, for example, we get to a month, we're expecting our cash inflows to be. X amount higher by percentage. I can then just essentially input that into the system and that that kind of covers all basis. That would be the preference. The reason I say that is there is some. You want to the way that we collect. So we tend to collect quite a bit of our monthly inflows in the first two weeks of the month. And then less than it kind of tails off towards the. The final week of the month.
Me: Yeah.
Them: And I would like to keep that rationale in there and not just layer on top like a blanket. 2 million a week additional, for example.
Me: So it could be a bit like, hey, I want us to be front loaded or backloaded. Like, the. The bulk comes in earlier versus stuff like.
Them: Yeah. That would be that. I mean, that would be the hope with the forecast anyway, is that at some point.
Me: That pattern is still in there.
Them: Exactly.
Me: Already. I got you. I got you.
Them: Yeah. Yeah. But then maybe, yes, we have that pattern in there to say first week, in the first week of the month, we collect 25. The second week of the month, we collect 40%. Third weeks, you know, we just have that, that, that represented within the, within the, the forecast. But if it was then the opportunity to say for December that we're going to flex that down by 5% based on public holidays. And. But then in January, We should see an offset of that. Plus, it's our seasonality, so we're going to flex that up by 10%. You. You then start to get. You have. You have the palm AI generated forecast, plus some rationale and understanding that we have in terms of seasonality from our side. But then it also allows us to. Keep the weekly. Sorry, I'm trying to explain this in a clear way, but keep that weekly percentage number. But just flex it up or down as opposed to just layering on top. Blanket. Values across across the full month. And then this is where it comes in, where we see significant differences. So, for example, if we we were to input our January budget numbers now and we were to click on revenue or click on customer inflows, we would likely see a pretty big difference, I would expect, based on that seasonality. And that would be a like it would essentially be a something that I would look at and take action upon because I recognize that we're a little bit far away. Doesn't necessarily have that built in as a seasonal uplift.
Me: No, but this is what we're trying to do, right? So how, how to make these forecasts, like short trust the baseline forecast that we provide you with that managing, like, successfully to capture, for example, this seasonality. But then also allow you a way to. To actually. It's almost like if you want to, you can almost like, co create the forecast together.
Them: Yep. Yeah.
Me: With the AI, so to speak.
Them: Y. Ep.
Me: Now I'm drifting away a little bit because this is actually tying into another feature where it's very much explorative stages already, but we are looking at that kind of. Modeling assumptions. We're thinking about it right now. Into cast, and that would include things like you've mentioned to be able to adjust it by a percentage over a specific time period. And things like that. And what I'm hearing is that likely as an additional reference or decision support within that experience. It would also be good to see these other lines. Right. One, you're working on your forecast. But I guess there's so many nitty gritties we could dive into there when the time comes in terms of like, hey, yeah, I show you fpna, but that's for the full entity. Or for the full company, even. And does that help you figure out? Well, then, for these three accounts, you know, like that overlay versus these three accounts. Like how. How does that all work? Sort of. And that super interesting as well.
Them: Yep. Yep. Yep. Yeah. Yeah, if that would be an interesting one as well. I mean, at the moment, our FBA budget is full company. There's no kind of granularity beyond that. But I expect in the future that would be. But that would actually be quite a big shift internally as well. It would be a big change for the FBA team. And I think with that would come some changes to the process anyway. So it's likely not worth going that down that route as yet. I think from a high level reporting wise, what we're talking about now, for example, the graph that we have in front of us and then those, those tables below. In terms of the actual numbers behind it. That would help with, with the process as it stands. But you're right in terms of if things get more operate like the way that they split things out or the way the viewpoint changes, then you could see this in a multitude of ways and, and then potentially that gets very difficult to replicate. From a reporting point standpoint within the system, if you need to see it in every single comparator and every single company in every single bank account, that's. That's challenging. What I can say, I think the, the closest or the Most granular or FB and 18 would ever get would be by company. I don't think they would start spinning it out by bank account. They really don't care about that. That's. That's more my side of things. So it's fair to say we'd only ever be by company. And even before that. It's probably more regional at the moment. Our regions are Germany and everywhere else. So relatively straightforward. But I could see that. That being spit out at some point. Maybe they look at countries inevitably. But yeah.
Me: But so how does it work for you right now with your FPNA forecast? Is it just like you receive the spreadsheet? I guess there's some. Some spreadsheet or something. Like some. Some file that contains actual number, dates, categories. Do you also talk about or sync up or receive information on the assumptions that are driving this forecast?
Them: Y. Ep. Not, not from my side at the moment. So the essentially the way it's built out is we have business partners across the, across the, across the FB and a team who engage with their counterparts on the, the individual teams, and together they come up with reasonable and accurate budgets. Some are relatively straightforward to do, so VAT again, is pretty straightforward. But then when it comes to something like our revenue, our customer inflows, that's built across a what we call like a cash engine, essentially. We call this taking our revenue expectations for the year and then building in a huge amount of assumptions to get to what we think that's going to mean from a cash inflow perspective and that so. There is a million. Yeah. Depending on the category. There's a completely different way of viewing it, and the way. And the different way of building that up across the team, there's an added complexity where when you look at. At the moment, you have the categorizations. As kind of payment type, let's say. So customer inflow or supply payments or payroll vat. Those are kind of. Yeah, let's just say transaction type or whatever. But actually there's a layer above that within our team where we say operating and non operating. And you can have that split out if you want. The way the FBA team have that. That spit out. I think would be exceptionally hard to. To do within the system. It's something that Christian I. And the way that we first started building things out for Persona within Palm, we were trying to replicate that, but it's. It's just not. Not doable. There's nothing within the transactions and the. The essentially the statement data that would help to differentiate between a, like an operating supply payment and a non operating supply of payment. So that's where we come up to a thing, say, okay, what treasury can and can't do. But that was an interesting exercise to kind of make sure of that one. So even with. To at the moment. You have those. Those various different transactions site. You've got card, cash, overpayment supplies, these kind of things. I think our categorization would actually be really, really straightforward, and we'd literally be like four. Four different categories to, say, cash, payroll tax, but probably more likely just VAT and then everything else. Because that's the easiest way that we can split, split that, split things up to then reconcile that to the FPA budget forecasting at the moment. That, that, that's really the easiest way to do it.
Me: Gotcha. Okay? I'm gonna return to my. My questions. I covered that a little bit, but how you're currently managing it. I mean, maybe there's a bit more to say.
Them: So, yeah, the way. I guess what I haven't really touched on is the way that we currently. Sorry. I'm just going to drill the blinds. Sorry. I was just getting sun shining in my face. Shouldn't be complaining about the nice weather. The way I. The way I use the FPNA forecast is at the moment, it's very instructive for me. Not it. So I have the reporting point that I provide the actuals that then get looped into the. Cash flow forecasting review for the budget side. So, on a monthly basis, I'm taking all of our transactional data from our erp. I'm categorizing that I'm mapping it as best as possible, and then I'm that is then the reference point for the actuals that wouldn't necessarily be coming from. I wouldn't expect the palm system to be able to replicate that for the same reasons. The way that we map things within workday. We can have a lot more data points within workday than we're going to be able to get within Palm. So that. That's one other point. The final one I was going to mention actually. Yeah. Is then the what why? Would be interesting to see, at least for the foreseeable future and to have some of those those data points within Parmas. I'm actually using the monthly rolling forecast from the in a team at the moment as a basis for my own manual transactional build of a forecast for myself. So I'm say, for example, I'm taking their monthly revenue or monthly cash inflow value. And I'm splitting that out. On a. Like across the month of December, for example, and then I'm doing the same with the supplier payments. And I'm trying through just historical trends and some logic that I understand. I'm then applying that to the various different bank accounts and various different currencies to get some form of transaction transactional level forecast. But that's where it also comes helpful for me is that I've relied on those numbers for quite a while. If we then start to shift to use Palmer's like the single source of truth for transaction level forecasting. I still want to have those references in there to make sure that we have that bridge, if needed. And, and to go back to that point, we can spot. And there's maybe some inaccurate either way. Whether it be seasonal or just a something, you know, completely ad hoc that. That isn't yet considered in a bump system.
Me: Makes sense. What? What? Supernitting Ricky. But what would be data points that exist in work data we don't have, for example? That's just.
Them: Yeah.
Me: So.
Them: This is stuff. I don't think this is the when you get to the difference between ERP and and what treasury management system, but it would be things like cost center, spend category, project spend category, all the way that the accounting team are taking our statement information and transacting information and then applying it to the financial statements. Themselves and. And the way that they build that out.
Me: Would it so in a hypothetical future, if it was possible to map categories for specific accounts to the gl, is that something.
Them: Map categories for specific accounts to the jgl. Yeah, again. I mean, what would be interesting? Yeah, if that. If. If that was possible, I'd be interested to see that. It's basically automated reconciliation. Automated mapping with it is happening within workday at the moment. But there's usually but that's usually applying it to a certain level, a certain code, and then but accounting team will. Or a certain level of detail. Let's say our accounting team are then taking that and applying it somewhat further. So if there's different differences between supplier payments, say, for example, you have one supplier, but that supplier is being used for 10 different things. If you have done transaction payment and it's based on an invoice, there's a lot of automated reconciliation you can do. But still, at the moment, there's probably the need for someone to go in there and say, okay, we're going to attribute 500k, if that cost, then to this. This spend category and this cost center, and then the rest of it's going here and the rest of it's going there. That logic isn't. Isn't yet within workday, and I. I think it would be. Yeah, I guess my question would be if that's the. Correct use case for a Treasury management system. I think it helps a lot. It helps a lot with the mapping. I mean, it would be great from my side if we could get that one to one, but I'd expect that to be a really huge build and there should be other systems out there which are dedicated to that, whereas maybe the treasury management system is not necessarily something that is being asked for from the treasury side. That's more of an accounting thing.
Me: Yeah, 100%. It's just one of these things that keeps flying around sometimes, like, hey, wouldn't it be great if we could. And then it would be helpful to export the data with that gel number included in the transaction.
Them: I I yeah. I, I, I think, I think what would be interesting on the topic, it depends on the integration. So if the integration is going directly from Banks into Palm, for example, you just have the raw CAMPED statement data. I think that's. That would get very challenging to do. But if it's actually the integration is coming via an erp, like it is for us at the moment. So the integration to workday, it would be interesting if there was the chance to take in additional data points. So once the posting is completed within the workday system and then you can start bringing through cost centers in other categories and then use that to kind of confirm the mapping in a way and maybe get more. More granular within the mapping. That that might be an idea, but again, That's.
Me: Y.
Them: That. I think. Yeah. I. I don't necessarily know if that's at least with this, at this stage, if that would be completely worthwhile. I mean, I talk about mice. There have. That's a nice.
Me: Eah. We can. We can move on. I was just curious. So. You did mention the feedback loop earlier. So I'm curious about, like, who are the stakeholders involved in this, and what do I need and how does your process work now?
Them: So the, the feedback. Well, the people I engage with at the moment are the FP and a team. So I, I mentioned that I provide the actuals for the essentially I take the workday transaction level data at the moment, like raw data, and I kind of based on the various different data points that we've discussed. So entity spend, category, cost center, various different, you know, things that are in workday. Either mapped that to get to what we, you know, a final valuation and final final input value for each category. So we have that for cash inflows and for supply payments and payroll and what have you. I input that into an FPNA system for comparison, then against. Their comparison. A so we use a system called adaptive. It's like a reporting system, but essentially they use that then for on like their final end of month reporting, they're kind of brought into the senior management team. For comparison against their own fonts. So essentially against their budget and against then they're both their six monthly budget, but then also the GFC number, which is the rolling forecast you then have. So you have two versions of the forecast, one like standard, like one that's static for the six monthly but then ones this monthly rolling, and then you have my actuals number. And again, you're comparing the three, the various different variants. If you plus those three. So my main stakeholders are then the FP and A team. But in addition to that, you might have. They're the ones in charge of the reporting piece. But then you also have stakeholders who have input potentially or engaged with the FP and a team for some of their own numbers. So, for example. If I'm saying, oh, our tax payments this month were 1 million higher. Than was expected within the GFC and the budget. They will, then I would expect the FNA team to then reach out to a stakeholder in the tax team who might loop in me. So you get. You get like a very. Depending on the category.
Me: Yeah.
Them: You might, you might get looped into various you might get looped into various different conversations with stakeholders to understand where these numbers are coming from. What was the driver of the variance? Again? That corporate tax number is, is probably the best example when something's happened, you know, a authority tax authority could direct debit us. Without us really having any, any clear viewpoint. If someone hasn't been monitoring their emails to say this is going to happen next month or something like that. Something like that could pop up. And what would then need to happen is that feedback loop is to say, okay. We have that extra 1 million outflow this month. But that was forecast for instead of being forecast. Say earlier in the year we had it, it debited within July. But actually, this forecast for September, it just means now we need to adjust our rolling monthly forecast. So we need everyone to be on the same page to say yes. This was the flow that was identified. And it's not necessarily an additional payment that wasn't expected at all. It just means that it's happened earlier in the year. And in meaning that we now need to adjust for. The next few months. That's kind of the feedback. That.
Me: Super interesting. It's. It's palm helpful to you today to help identify, like, anything like that. What was the.
Them: Yeah, I think the I would say. Not necessarily. And I. But I also don't necessarily think it's the purpose of palm. And again, it comes back to the granularity we can get from workday when it comes to the way that we map our cash flows. The the way that I see palm being very helpful is actually not going as granular as we do within our workday categorization. That workday mapping where we don't just map for those high level categories that I mentioned before, we're not just mapping the cash inflow and supply payments are actually going a level beyond that to say, okay, we have payroll, but we have salary payments, we have payroll tax, we have employee expenses. We're mapping all of those individually because that's helpful for variance analysis from our FP and a team. But actually what would it be helpful? And we have that for all different categories and we have that operating and non operating split again. So it gets quite, quite detailed there. But where palm would be very helpful is actually higher level, but more timely information. So there's a report that I guess building out at this point where we have. I have a piece of work that I do on the first day of each month where I take the cash burn from the previous month and confirm that. But I also tried to provide some high level analysis. Based on what I think were the main drivers of that. So for certain things, we can be. I can say, okay, our VAT number for last month was in line because that's a standout flow. It's something I can see very easily. We have a individual collections. We have a standalone collections account. So I can actually be quite. Quite clear in terms of what flows were going through that account. But there's other ones, like payroll and supplier payments to the most challenging ones because they look very similar. Within, at least through from a statement perspective, they're difficult to separate. And that's where the palm system might become very helpful is to give that if we can get very accurate on the categorization. Of cash flows. I can then start to use the system for really highly updates. But. And it essentially replaces some manual work. Manual work I had to do earlier this week, which takes a few hours and if it potentially could take a few minutes, if we're, if we're comfortable with categorization.
Me: Y makes sense.
Them: Good. So, yeah, that's. That's. That's one of the really key use cases for me, actually, is.
Me: Yeah, it's super interesting to hear.
Them: Yeah, I think it's like, I'm sure every company is doing it differently, but there is that really key for us. There's like the keen focus on, on that day one reporting or early month reporting. And that's always been a stand up one for me at the moment. It's a pain point. And if we can get to a position where I can be really comfortable relying on, on palm as the source of my, my commentary, basically. And then we have like those static data points within there to say, okay, this was our budget. This is now. What's happened? Within cash inflow for the month, for example. Yeah, super helpful.
Me: Two Two cheeky questions. One Would it be possible to see like an export or share one of those FP&A budgets with us, both the fixed and the rolling one, just so that we can get an idea of the data and the shape of it and.
Them: I would probably have to ask the affinity. Yeah. If that's all right. I know we have clauses that are not. Not. Not to say no, but I. I think I might be something I'd have to. To discuss with them. I. What I could probably do, though, is give like, a. A shortened level, a shortened view. On that, let's say, and add some form of what I would expect maybe to upload, because it probably wouldn't be the full table that you would see from the FP in 18 Anyway, we'd want to. To shorten that.
Me: Yeah. But, I mean, yeah, I mean, and I mean, given if it's gonna be in the pond platform at some point,
Them: Yeah.
Me: They'd be comfortable with it. So maybe, if possible, just have a hat.
Them: Yeah. The only thing. Yeah, the only thing I was. Yeah, no, I agree. For sure. And that's as. It's not a no. It's just a. Something I need to discuss with them. So they're not even aware of the Palm Platform at this stage. Put it that way. So it's something that. It's really a Treasury and accounting driven project. If we then to start, we have the forward looking information in there, obviously the palm, you can see our transactional data. But if we're then starting to layer in budget, which is. Super confidential even within the company. Like. Yeah. So that because it's very, very sensitive in terms of the, the way things are. Certain things are in there is is quite for your, you know, you have to be in the know a little bit. That's where things get a little bit sensitive, basically. So I, I have I. I have to check with them, that's all.
Me: 100%. And also to begin with, it could be like dummy data as long as the and the overall categories match up. I mean, you know, until if we're pulling this off in a nice way, so there's value for you to actually use it and. Yeah.
Them: Yeah, yeah, yeah. Yeah, indeed.
Me: And then I guess my second question will be a hard no, because I was gonna ask if we could take a look into the system that they're using.
Them: I yeah, I I I don't. Not for now. Maybe what we could do is to. Look at some historical as. As a reference point, and then maybe I can build out a table off the back of that of what I would expect that could look like. Because again,
Me: Here.
Them: The. The table that they're using. Is 100 rows long and and goes into all types of detail that isn't going to be relevant in terms of the way that we need to see it split within pam. So I'd be taking a report and then aggregating it. Anyway.
Me: Okay?
Them: And so maybe it makes sense to, to take a historical view like one of the, the older ones, and build out, then build out what the table would would look like if I was to then start uploading it.
Me: For sure. Yeah, 100%.
Them: Cool. Okay, I'll make an effect of that.
Me: Super interesting. So I know we've already covered it, but it's always good to repeat and try to like, if you as concretely put as possible. From your side. What exact outcomes are you looking for here? You know? That's also a bit of a big, like, span across. Some are very, like, working capital focused. Others are more like you focusing on how, like, do they reconcile? And it's, it's, it's an. It's an input to.
Them: Yep.
Me: Your cash flow cast, essentially. So just like. Yeah.
Them: I, I, I say that. Yeah. Maybe split it into two. So it would be that, that final point you were mentioning, it would be an input to my forecast and a reference point where I'm seeing gaps one way or the other to instruct myself essentially to make adjustments and make sure that my transaction level forecast is somewhat mapping towards our FP and a logics and analytical categorization level that that's super helpful because that will allow me to flex the numbers, whether that be by a percentage maybe in the future, but at least in the short term via a number down in a particular week or across the month. To get essentially more accurate. So higher, higher cash inflows expected in January. I would flex that up within palm and hopefully that that would allow me to be more confident when I'm making investments and, and get some interest benefit. The second point then is to have the actual data points within arm, to have a central hub, I guess. Let's call it that. Essential laboratory, source of truth for all of my treasury reporting. So that would be the, the t plus one analysis that I was mentioning in terms of the, the work that I'm doing at the moment. So I. That would allow me to have all of my analysis and review sit within, within palm, but then even further to that, to support the feedback loop and the other reporting activities. That I do across the month with the FP and a team and then other stakeholders across the business to flag variances or get, you know, really quick pieces, really quick analysis, really quick data. Whereas at the moment, it's each, each one is kind of individually done in a different way. If we were to have that in one system and we have those data points all in one place that variance analysis actual to forecast, forecast to forecast action. All those various different reviews would be super, super helpful to see.
Me: Yes. And providing you can drill down, I guess.
Them: Yeah, yeah, a bit of it, I guess only to a level. And that, that I think then comes back to that, that I guess that leveling is, is probably an important point to, to decide upon is that we fundamentally like, I guess fundamentally what, what is, what are we expecting to use the palm system for? And I guess that goes back to the conversation around what the workday system is for and where the data points, the amount of data points that sit within there versus what we expect palm to be, which is kind of. Well, for me, it's like the quicker short term reliance in the various different categorization, but it's not going to be used for a at least at this point. Used for a financial statement. Mapping of transactional coding in that? No, no, but I guess that, that, that. That's the point. So we drilled down into the data, but to a certain level, because again, going back to that point, that point is we can drill down to a certain point. But so vat very straightforward to build out and do a one for one. Right. Cash inflow would be the same, but for various other flows. There's the way that we map things and categorize things on the. On a company level here. Is going to be unique, and I think each company probably would do it in a unique way. And then to map that across, to have that automatically done correctly within palm, I think would be a. A big stretch and shouldn't be even something we're looking at at this point.
Me: 100%. I was more referring to like within the palm context. Let's say you could do your high level budget categories, map them to palm categories somehow. And if you'd like, see, like, the driver of the variance between the two forecasts, for example, from the palm point of view, like, I reckon it will be quite different.
Them: Yep. Yeah.
Me: So I think the context there is quite interesting to understand better because the budget, the fp, it will just be a number. I assume. Right. Out of the box. There wouldn't be any context around that number. What's in that number? Whereas in the palm forecast, maybe you've added a one off and that's the reason it's higher, for example.
Them: Yep.
Me: That's a piece of context we could provide you with. But if Pam forecast is lower. Maybe there's some. And then I guess that's what you mean. That's your signal to go and investigate. What is going on here?
Them: Exactly. Yeah y.
Me: So my deeper question is then like once you found out that then action would be adjusting, probably the palm or. Yeah. Making some form of adjustment. And I'm thinking is context you want to save while doing that adjustment as well, that very pretty one.
Them: Eah, yeah.
Me: But.
Them: Yeah, no, it's, it's. But it. I think that it's almost the case by case basis, depending on the category. So if it's customer inflows. Which the it's. I think I mentioned before, it's built Emma Cash engine, which has all different types of assumptions and has some seasonality built into it. This kind of thing, if there's a big difference between the two, it would probably end up being the result would probably be me flexing palm. Excuse. Me a palm. Inflow numbers. If it was something else. If it was vat. Or if it was corporate tax, or if it was. If it was payroll, if it's one of those things. Then that would probably be worth me going and investigating and not necessarily just adjusting, Pam, but maybe even challenging to our FB and a team or to our tax stakeholders, for example, to say okay, within the FP and a budget or forecast, you you were expecting a 500k or 1 million corporate tax inflow this gone to, like, a reimbursement. Is that going to happen this month? And if they say, oh, no, that's. That's been pushed back by three months. Then it wouldn't necessarily be an adjustment to the gfc. Sorry. It wouldn't be an adjustment to Palm. It would actually almost be like a note to say, I accept this variance because this is not happening, you know?
Me: Yeah. Yeah. Gotcha. Yeah, it's covered for. In that sense, there's no need for further action, so to speak.
Them: Yeah, yeah, yeah.
Me: Very cool. So I'm sure we'll get back to you when we have a bit more to show. And a bit more detail, but this was already super helpful. I feel like I have a good, high level understanding, at least somewhat. What you would use it for.
Them: Cool. All right. No, yeah, if you need more, like, I'm happy to have a follow up session, as always, you know, have to run through these things. It's helpful for me also sometimes to just get my own thoughts in order around. Yeah, to the point. Like what. What do we end goal? What are we expecting? To Palm system for when it comes to reporting and what versus our current process in workday kind of what, what is the cut off a little bit? But also, yeah, just to understand kind of what's in the pipeline. But I also appreciate making things more and more complicated in the way things that are, you know, kind of what's. What, what, what is the request there? So, yeah, I obviously appreciate running through this and the, the ongoing effort to, to make these things a reality within the system.
Me: 100%, and I appreciate you taking the time. I had one small thing. We know you've been ill, but just for your sake, the whole. Unicredit bank statement thingy. Was it clear the request from our side with a bank account in the column instead of the I don't what's in there right now?
Them: Yeah. I need to take a look at that. Yeah, sorry, I've got some. I think tomorrow blocked out some time to take a look at that. The request from J. So I will take a look at that and come back. It should be something that's relatively straightforward to do, but it may just be major. I I what I can what I think might might need to happen is that that's essentially the references that we use from that. That's what we have in workday. We either replicate them one to one within palm, which I. I would rather not do because they're very long, but maybe we create a. Like a monthly file where I just input the. The data or we just upload it. But also it has, like, a mapping tab, which we. We can have an additional column within the file. That then maps each account to the the palm logic, if that makes sense. So. But I will take a look at that. And see. See what I can do.
Me: Sounds good. Okay? Well, I hope you feel better.
Them: Cool. Thank you. Sorry, I. Thank you. I hope. I hope you remain free from this. Just avoiding it. On the lead up to Christmas, I'm actually quite happy that it had. I mean happy, but I mean, I'd rather have it now than over the Christmas period, so hopefully that that doesn't happen for you. Are you? Are you? What are your plans for. For Christmas?
Me: Oh, I'm taking two and a half weeks off.
Them: Nice. That's good.
Me: Yes. That's good. No strict plans. My parents bought a little countryside cottage thingy. So my goal for a couple of days skiing a bit something, I don't know.
Them: Nice.
Me: How about.
Them: That's else, please. Yeah. Back in the uk, I'm going to take some time off as well, but we end up kind of dotting around quite a bit when we go back and I would rather not do so much of it this. This time. I want to see people, but it ends up being quite tiring. Even just doing that is. You want to see all these people? But you try and fill it all into a very short period of time. And I'd rather just go back and spend, like, a weekend. I'd see them properly as opposed to relying on, like, the UK train service, period. I can avoid that if possible. For sure.
Me: I feel you. It's the same here.
Them: Yeah. Cool. Well, yeah, nice to catch up. And as they say. Yeah. Let me know if you want to follow up on this or anything else. Always. Always happens to run through.
Me: 100%. Thank you so much. Okay?
Them: Nice.
Me: See ya.