Welding & Gas CFO Club Recap July 2024

Thanks to the crew of 17 that were able to jump on last week for another fruitful discussion. I continue to love the dialogue and sharing amongst the group.

Summary Notes

• Artificial Intelligence
  • How are you using?
    • AR Automation, bank reconciliation, etc. (works with TIMS) – Cashbook, took about a year to fully implement, not that pricey, trying to free up 1 FTE to slide somewhere else
    • Creating job descriptions
    • SOP, training and guides – Scribe, IT and training group using heavily, documents things, like logging in setting things up, captures tasks, tracks your clicks and automates the build of the procedures
    • Content creation and social media posts
    • Most agreed that AI can get you about 80% of the way there, but needs some finishing touches and verification
  • Do you have an AI usage policy?
    • Some were in the process, most didn’t have and hadn’t started
    • Recommendation: Put a policy in place, don’t let the inmates run the asylum, discuss as a management team what are acceptable uses and unacceptable uses, otherwise your employees might not understand the risk
      • Most were nervous about uploading customer info, proprietary/sensitive/financial information
  • AI & Cybersecurity Awareness
    • Deep fakes are becoming easier to make (voice and video)
    • Articulate emails are becoming more prevalent (mostly gone are those choppy English emails that were easy to spot a fraudster)
    • Many executive teams have created “safe words” or a process to ask questions that a hacker would find difficult to answer or could be a trick question
    • Accounting, A/R, AP teams need to be more intensely trained on this
    • Social Engineering Fraud and Invoice Manipulation Fraud are the two most uninsured/underinsured aspects of insurance today – carriers either won’t provide or provide low sublimits (maxing out at typically $100K-250K, depending upon controls)
      • Social Engineering Fraud – think AP, you get duped into sending money to a bad guy
      • Invoice Manipulation Fraud – think A/R, your customer gets duped into sending money (intended for you) to a bad guy
    • Recommendation: understand your coverage, educate your teams and educate your customers
      • Think about updating your invoice language to include something like “we will not change bank accounts without a 30 day notice and a phone call from your representative” on the bottom of an invoice or email – this prevents the fraudsters from preying on a high sense of urgency and puts some of the onerous back on your customer to verify changes on their end
  • Check Fraud + Positive Pay
    • Most, if not all are using, some are considering updating to include additional levels (beyond check amount and date, to include payable name, etc.)
    • Most running this through their bank, some also incorporating through TIMS/ERP

This “club” is intended for any welding & gas distributor acting in a financial role.  Please join our next meeting for even more great conversation and insights.

Upcoming Meetings

• August 14th, 2024
  •  Topic
    • Fleet Technology (Cameras, Telematics, which systems, evaluating, rolling out, driver buy in, effectively using, driver incentives, carrot/stick, mobile device use)
    • Fleet Management Software (MVR’s, non-delivery driver protocols different or same, which systems)
• October 16th, 2024

As always, if you have suggestions for future topics, please don’t hesitate to reach out.