In this roundtable discussion, experts from Barclays, Howden Joinery, a kitchen and building supplies retailer, and Trade Ledger, a provider of business lending technology for working capital, discuss strategies for successful treasury transformation, highlighting the importance of communication, data-driven decisions and cross-functional collaboration.
Roundtable participants:
- Emily Barker, director of finance business processes, Howden Joinery Group
- Martin McCann, founder and CEO, Trade Ledger
- Divyesh Modi, managing director, trade and working capital, Barclays (chair)
- Lucinda Webster, global head of commercial issuing, Barclays
Modi: One of our main goals at Barclays is simplifying treasurers’ lives, working across our trade and working capital, cash management, FX and payments teams. What’s top of mind for each of you regarding treasury operations right now, either from your own perspective or from conversations with your clients?
Barker: In my current role at Howden Joinery Group, I’ve been focusing on improving processes across the finance community. Over the past couple of years, we’ve concentrated on enhancing the source-to-settle stream, from onboarding and consolidating suppliers to payment methods. Recently, we’ve collaborated with Barclays, particularly over the last 12 months, to optimise our use of Barclaycard as part of this process.
At Howdens, we have a strong cash flow, so managing cash and accounts payable isn’t a major concern. However, over the past six months, we’ve been exploring the switch from traditional BACS payments to card payments. Our goal is to streamline our processes without adding complexity, while securing rebates and offering more flexible payment terms, especially for suppliers where cash flow is crucial.
We’ve made some progress, particularly with our large suppliers, though it’s still early days. We have 850 depots in the UK. Some of the early success has come from switching payments for our rates bills, as many councils are happy to accept card payments. However, feedback from other vendors is mixed – some prefer BACS to avoid card fees, while a few are content with the switch, despite the higher fees. Generally, IT and software suppliers have been more open to card payments, while suppliers of raw materials have been more resistant. It really highlights the need to evaluate suppliers based on the nature of their services when considering payment methods.
McCann: From a technology perspective, we’re always balancing market demand for innovation with the appetite of banks and corporates to drive change.
Our business focuses on next-generation technology, providing a level of automation that demands investment in understanding data across the enterprise and supply chain. While creating the technology is relatively straightforward, much of our effort goes into educating stakeholders on the opportunities and benefits. Convincing them that investing in data and technology can provide a competitive edge and potentially transform their business model takes a lot more time than I would have expected.
We have lots of interesting conversations about the potential on both sides of the transaction – payables and receivables – especially how leveraging data and bank credit can increase capital velocity and yield economic benefits.
Webster: Key customer needs in treasury operations revolve around reducing manual processes, particularly in paying invoices, and optimising payment flows. We’ve focused on meeting these needs through data analytics, working with teams like Emily’s to suggest improvements in accounting processes.
Digitalising and automating these processes is crucial for both buyers and sellers – ensuring timely payments and providing flexibility and certainty.
Our solution, Precisionpay, integrates virtual cards with ERP systems, automating the entire process and offering significant benefits to customers seeking to transform their operations.
Modi: Lucinda and Emily, you’ve both touched on efficiency, and Martin, the role of technology in achieving it. Emily, you mentioned strong cash flows, so traditional treasury metrics aren’t a major focus. But on the receivables side, with inventory and stock, how important is working capital in your overall treasury metrics?
Barker: The receivables side is massively important at Howdens. Our customers, primarily builders, often have credit accounts with us, usually between £1,000 to £10,000. They buy kitchens and other products on credit, with 30 days end-of-month terms, averaging 45 days to pay. September and October are our peak trading periods, making cash collection critical. We have a credit control team of around 80 people managing this, using various payment methods like phone, online and in-depot options. We’re closely monitoring KPIs in this area.
We’re also upgrading our SAP system to S/4HANA, with an initial focus on enhancing our accounts receivables management, which hasn’t had much love and attention since the last SAP upgrade 20 years ago.
We’re implementing a receivables management module to streamline the debt collection process and improve workflow, including features like a note system for better tracking. Enhancing and connecting this process is a major focus for us over the next 18 months as we upgrade our SAP system to S/4HANA.
McCann: I think Emily’s situation mirrors that of many mid-market and large corporate clients that we engage with through our banking customers. It strikes me that there is significant potential for efficiency gains in both payables and receivables. Managing a large team is costly, and streamlining or outsourcing processes using technology and credit could accelerate working capital and improve cash flow predictability. We’re seeing a lot of treasurers starting to think about how they can add more value to the overall business strategy, particularly in turbulent times.
Some treasurers are partnering with us to explore how to use cash more effectively on the balance sheet. They’re looking to allocate more capital and credit into the business and explore treasury products that can boost the bottom line. However, it all hinges on automating these complex processes.
Modi: Let’s shift gears for a moment. A couple of interesting points have been raised about the focus on credit and efficient cash use. Lucinda, since a large portion of the products you offer involve efficiency and include an element of credit, how do you see the role of credit provision within your solutions? What kind of conversations are you having with clients about providing credit?
Webster: Yes, we offer customers a credit limit with interest-free days and provide rebates based on spending tiers. This ties into Martin’s and Emily’s points about using the extra days provided by card payments to manage cash flow more effectively. High-volume payments can also earn rebates, adding further benefits.
Additionally, offering end customers the option to pay by card can shift collection efforts to the bank, reducing internal processes.
Clients are very interested in optimising cash flow through these interest-free periods and the added security of fraud protection, especially for large payments. This is really important in the overall payment process.
Modi: From my perspective, when I talk to clients, bank-provided credit currently plays a crucial role in treasury operations as part of working capital management. We offer solutions like invoice discounting, trade loans for both payables and receivables, and lending against inventory or ledgers. These tools, when integrated into an efficient treasury operation, can significantly optimise cash flow, though there’s always a cost-benefit balance that treasurers need to consider. This balance is a frequent topic in our discussions with clients.
Let’s shift to technology as a key area. One major challenge in treasury transformation is the time, money and effort required to implement a successful programme. Emily, you mentioned your receivables haven’t seen a change management programme in 20 years, which is an indication of how difficult these transformations can be. On the payables side, when you implemented the Precisionpay solution with Barclays, how did you manage internal stakeholder satisfaction and ensure a clear cost-benefit analysis?
Barker: To implement Precisionpay, we engaged key stakeholders, particularly our UK accounts payable teams – we have two in the UK and one in France – and selected certain vendors to start with. We kept our backend SAP processes the same, only changing the payment method for these suppliers from BACS to Visa. During payment runs, invoices marked for Visa are processed through Precisionpay, where the payments are handled via generated cards. The process varies – some payments are made via links, phone calls or keyed into websites – so we assigned two people to manage this, although it’s not a full-time role for them.
It’s not fully integrated into our SAP system yet, as we’ve only been using it since January. This year was about testing its functionality, simplicity and whether we could manage reconciliations and controls effectively. After six months, we’ve found a way of working with it and it’s pretty slick. It’s now just part of our business process.
We’ve also addressed tail spend by giving some teams credit cards or using Precisionpay, especially for resource-heavy tasks like booking events or travel. This has reduced the need for retrospective purchase orders, saving time and increasing efficiency. It also avoids setting up vendors for one-time use, which is a labour-intensive process involving due diligence, bank details and insurance checks. Overall, it’s streamlined operations and given our teams more time to focus on other tasks.
Modi: Tackling the tail spend is indeed important, even if it’s not the most glamorous task. I understand the effort involved, and it is crucial work. Martin, from a technologist’s perspective, do you have any immediate reactions to what Emily shared? Additionally, what do you see as the key challenges in implementing a technology change programme?
McCann: Change is always the hardest thing in enterprises, and Emily’s story reflects the focus we see in many companies. There are sort of two attitudes, depending on the size of the company. Generally, mid-market companies tend to prioritise their core business value, while larger companies, with more resources, look to mature their treasury, payables and receivables functions, leveraging their scale.
What we’re finding is that much of the technology adoption is being driven by financial services providers, for example, in our work with Barclays on the receivables side. It’s increasingly incumbent on banks to guide businesses in adopting technology by providing solutions to their problems and helping them understand the easiest adoption methods.
On the enterprise side, there’s a minimum level of modernisation required – such as ERP upgrades, like the one Emily mentioned – to engage with and benefit from these digital financial services.
It’s about prioritising a portfolio of changes in line with the business’s desired outcomes. Banks play a crucial role here, often leading with technology solutions that enterprises then integrate into their own infrastructure. Precisionpay – although not a solution that we provide – is perhaps a good example of this approach, where the solution comes from the financial services provider, and the enterprise works to integrate it within its own systems.
Modi: Lucinda, Emily’s example is a great success story of implementing a new technology programme. Do you have other examples, whether successful or not, that could shed light on the key challenges corporates face when implementing a treasury change solution?
Webster: Yes, from my experience, when companies try to digitise the entire end-to-end process on their own, it can be costly, and maintaining the technology adds ongoing expenses. We’ve found that partnering with specialists who excel in their areas, similar to how we operate, is more effective. Our solution, integrated with key partners and platforms, serves many customers and is constantly upgraded in collaboration with these partners.
Where we’ve faced challenges is when we have formed individual partnerships and invested heavily in connecting with them, only to find that not all of our customers were using those specific solutions. In hindsight, it wasn’t the best use of resources. A key learning for us has been to work with platforms that connect to many suppliers, offering more options to our clients. This approach provides flexibility and scalability, making it easier for our clients while also giving them choices. It’s a lesson we’ll continue to apply moving forward.
Modi: It’s worth discussing the technology choices we’ve made in trade and working capital, as they reflect the direction we believe the industry is heading. When we re-platformed our core system, which was 35 years old and at the end of its life, we faced a decision: either develop the system in-house or implement it using a software-as-a-service (SaaS) model. We opted for the SaaS route, integrating the software into our infrastructure while the core code remains owned by the provider, who serves multiple other banks. This approach spreads development costs across all users, ensuring we all benefit from updates handled by a technology expert rather than by us as a bank.
This platform also offers connectivity with third-party providers, allowing us to easily plug in new capabilities as they emerge in the market. I believe this approach is key to technological evolution and implementation. While we’ve applied it within the banking infrastructure, I think similar strategies could be adopted in treasury operations, especially when dealing with ERP systems or other core infrastructure.
Let’s shift focus again. Another important aspect of implementing these solutions is that success often depends on areas outside of treasury. For instance, procurement is crucial when dealing with payables. Lucinda, when we start a discussion with treasury or finance, do you find that other departments also play a significant role in the success of these programmes?
Webster: Our solution is quite versatile and is used across various areas, including B2B procurement and even wholesale travel. Depending on the client, we engage with different departments, such as accounting, treasury and procurement. Sometimes, multiple stakeholders come together, and we tailor our approach accordingly. Our analytics tool helps demonstrate benefits across departments, showing opportunities with suppliers and highlighting the accounting and treasury advantages. So, we work flexibly with different teams depending on the company’s setup, as the solution offers benefits across all these areas.
Barker: For us, for example, it’s important to engage with the buying team and other big spenders within the business. We’ve found that working closely with our procurement team opens up many opportunities, especially around contract renewals, which typically occur every couple of years. By reviewing contracts, we can identify chances to incorporate card payments as a method, and we’ve made sure our indirect procurement teams are aware of this initiative. Now, when they engage with suppliers – whether new ones or during contract renewals – they’re mindful of the push towards card payments.
Given our large and diverse supplier base, there are plenty of opportunities to expand this approach. Even smaller businesses, including some of our contractors, are increasingly accepting card payments, often using small, mobile payment devices. Maintaining a constant dialogue with the procurement team is key to maximising these opportunities.
Webster: Emily, when we talked earlier, you mentioned having two accounts payable teams in the UK and one in France. You found that by consolidating payments to the same supplier, you were able to leverage economies of scale and get better options. Could you elaborate on that?
Barker: We had a great example of a supplier used across different divisions, with payments being handled by different accounts payable teams. The supplier was frustrated because they never knew who to contact, and the account was disorganised, with small, low-value invoices and missing payments. We worked with Lucinda’s team, who confirmed the supplier accepted card payments, so we decided
to streamline everything. We consolidated payments through one point of contact, and the supplier is now much happier. They even mentioned last week how much easier it is now, and they’re likely getting paid faster too.
This experience made us realise the benefits of consolidating our fragmented processes. We’re now considering further consolidation within our accounts payable departments, possibly assigning specific people to handle indirect spend. It’s great that this idea is coming from the bottom up, as it fosters buy-in, which is really important for successful change management.
Modi: Martin, let me bring the same question to you. When you’re talking to corporates, what other areas outside of treasury are you engaging with?
McCann: It’s an interesting question. Treasurers are often seen as a specialist function, which can leave them somewhat isolated within an organisation. This isolation sometimes limits cross-functional collaboration and innovation, even though a more integrated approach could bring greater benefits.
When we look at implementing solutions, particularly embedding credit into the payables cycle, we often find that IT becomes involved because the real gains come from ensuring interoperability between the enterprise’s data and the bank’s data. This is one area ripe for cross-functional collaboration.
It’s also interesting – and somewhat surprising – that in many organisations, the automation of payables and receivables is managed separately, even though they’re two sides of the same economic transaction. Understanding and automating the entire end-to-end flow could unlock significant value. For example, with Barclays, we’re automating working capital facilities for corporate clients, which can be extended into supply chain financing solutions that offer added value to treasurers and CFOs.
Encouraging more cross-departmental communication and collaboration can reveal many opportunities to leverage the vast amounts of data and process knowledge that already exist within an organisation.
Modi: Do you have any advice for others embarking on a transformation programme in their own organisations? What would you suggest they focus on?
Barker: I’d say, if it’s a change management piece, it’s important to make sure you’re communicating clearly what you’re trying to achieve. You also need to have a solid understanding of what you’re buying and paying for in your business. Analysing your data is essential. At Howdens, we had strong data analytics, which helped us know where our payables opportunities were. It’s important to categorise your payables correctly and identify quick wins to start with. Don’t overcomplicate things.
With Barclays’ help, we identified that focusing on our rates payments, which total around £25mn a year, was an obvious quick win. We also used analytics from Lucinda’s team to match other vendors that were a good fit.
My advice is to take the help on offer, go for the easy wins first, and stay open-minded. We approached this as a trial for a year, ready to abandon it if necessary, but it ended up working out better than expected, with a lot of enthusiasm behind it. Sometimes, getting the right people on board can really make a difference.
Webster: That’s great to hear. For us, it’s all about listening to the client, understanding their data, and offering solutions that address their challenges or provide clear benefits. Like Emily said, it’s important to prioritise and tackle things step by step – start with a trial, see how it works, and then expand from there.
What’s really important to us in the issuing team is maintaining an ongoing conversation with clients. We’re always looking to adapt, improve processes and enhance product features to better serve our clients. It’s about visualising the impact; many clients still deal with manual processes that are time-consuming and unfulfilling for their employees. By automating and simplifying these tasks, we can help clients decentralise and streamline their operations, allowing their teams to focus on more valuable work. Constant improvement and staying attuned to technological advancements are key to making things as simple and easy as possible.
McCann: I think we can draw some general lessons here that apply broadly, whether you’re implementing change within a bank or any other enterprise department, especially when it’s technology driven.
First, the hardest part is the change itself. Even small changes that impact daily routines can face significant resistance, so it’s crucial not to underestimate this. Correspondingly, over-communicating the reasons for the change and its benefits is essential. The most successful programmes often have robust communication strategies, dedicated resources and sufficient budgets to support this effort.
Second, because change is challenging, it’s important to think big but start small. Don’t initiate change unless it brings real benefits. Have a clear blueprint for your change process, and break it down into manageable steps. Start with the quick wins to build momentum and foster belief in the process. For example, Emily’s successful implementation of Precisionpay could pave the way for further improvements on the payables or receivables side, making subsequent changes easier to introduce.
Finally, in our increasingly digital age, it’s surprising how much manual work still exists, particularly in payables and receivables. Start with the data – there’s immense value to be unlocked by leveraging digital data to automate processes, create new services and gain a competitive advantage. Even seemingly small changes can reveal significant opportunities if you focus on the data and use it to re-engineer your processes.
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