Episode 6: The Hidden Engine – Accounting at CPVO

Welcome back to Seeds of Tomorrow, the next chapter in our. Last episode we explored how CPVOSHR strategy. Is helping shape the. Future of work Today we look at another vital side of the. Equation how resources and finance support that same mission. How do people and finance come together to make the CPVO more efficient, more adaptive and more resilient? As a self funded EU agency, CPVO has to do more with less, balancing precision, innovation and. Sustainability this episode explores. How smart budgeting, AI tools and strong inter unit collaboration ensure.

That every euro. And every talent counts at CPVO. Efficiency isn't just a principle, it's a. Necessity as a self. Funded EU agency every. Euro must be used. With precision and. Foresight joining us today. Are Anna Maria. Sidery, head of the. People and Resources Unit and Christophe Yakovlev, CPV OS Chief accountant.

So welcome to you both. Let's address the issue. Of the challenge of self funding. Christophe. Let's start with you. Unlike many EU agencies, CPVO is entirely self financed through fees paid by applicants. That's quite unique. How does this affect? Your approach to financial management and what are the main challenges that come with forecasting income that depends on market demand?

Hi, Deirdre. Hi, everyone. Thank you. Indeed, it's a huge challenge. As you said, it's quite unique. We were only two self funded agency, fully self funded a few years back with the EYPO doing the trademarks and the intellectual property for businesses and trademarks in Spain. And now there are a few more agency fully or partially safe financed. So indeed it means that we receive monies from applicants willing to protect on the righties. And of course it means that we cannot foresee everything to the euro, it's not possible.

Whereas when you receive funds from the EU budget, you know what you are getting and then you have to then forecast all your expenditure, but at least you know what you are earning, which is not the case for us. So indeed it changed a bit things. Of course, we cannot. We are not magician. So we cannot predict everything.

What we try to do, of course, it's control what we can control. So we really try to keep an eye on expenditure and be very prudent and careful with this because as you said, every euro counts and at the end it's EUR from the readers, from companies, etcetera. So they are waiting for something in front of that.

And we cannot just say, look, we spend it like this and we don't care. So we have to be accountable. So 1st, we start with expenditure, so we cap them. We have ceilings to make sure that we do not spend more. And then with a lot of historical data, of course figures that we have in our possession, like number of applications or the average per year, the titles in force, etcetera. We're trying to fine tune a bit the revenue that we expect to receive.

It's not perfect science. We cannot predict everything. So, yeah, that means we have to, we have to make sure at least expenditure are under control. And then maybe we will mention this later. But unlike other agencies maybe where they receive subsidies from the EU, we have a bit more flexibility. And that means that we can have surpluses or deficits like private companies more or less.

And that means that year when we will receive more than expected or spend less than expected, we'll have a surplus that will a bit build a reserve. And then when we have a deficit, we take from this reserve. And so of course, this is as well something that is very useful for us because we have this reserve. We try to keep a buffer of something at least comfortable to continue business operations and to be sustainable. But at the same time, I think our rules are well done because we have an article saying that if we accumulate too many surpluses, it's not possible, It's not on the long run feasible.

So we have to reduce this reserve that means for breeders that we always try to find a balance between what we cost and and what they get in return. And that means that if we accumulate too many surpluses at one point, we'll reduce for instance, the fees or expenditure etcetera. So I think it's for the moment it's working and I we have a financial, a good financial position and at the same time delivering quality services for the for the Breeders.

That sounds very good indeed. And Anna Maria, very welcome to you from a management. Perspective. How does this? Financial model influence HR and operational planning across the agency. Well, thank you Adetra for having invited us today. It's again a pleasure to be here with you. Well, of course, we are very careful in how we spend money, this public money. And sometimes we are seeing a super strict, but I prefer to be seen a very strict that has the opposite because indeed we are evaluating, I don't say monthly, but on a regular basis our HR needs.

So the staffing, the needs of the agency. And of course the question is do we really need that or not. So we are making savings as much as possible. And what the outer world maybe does not say, because of course it's not so visible, is all the work we're doing with the Christophe's team and the HR team is to reduce expenses.

So should it be missions? Should it be establishment plan? Should it be cutting unnecessary expenses? Should it be automation? Because this of course is a lot of, let's say, resources that we gain. So we are doing really a lean management process to reduce as much as possible and this is ongoing.

And this then is visible when we present our budgeting from the Administrative Council. But as well, as I say in the previous episode, one, I said at the EU and the European Agency Network meeting that we reduce the accounting and finance sector for 15 to 3 in the years is a huge achievement. And again, I think that it's a major one, which we are very proud of. And we'll continue, of course, our efforts in reducing the expansion and improving the way we spend, of course, this money. Thank you, Anna Maria.

So, Christophe, could you? Share how the finance team works to maintain a high level of efficiency and perhaps some of the tools or methods that make it possible. Well, it's a huge, it's a huge question and it might be a lot accounting stuff. So I don't want to lose all your all your auditors. As I mentioned, we have a flexible way of working in a sense because we our decentralized agency, we don't receive money from from the EU budget. So for instance, we don't have the same accounting system that they do that they are using.

So we have our own system. And the good thing is that all these systems have been integrated in all our operations in the core business software that we have managing plan varieties, examination, etcetera and invoicing fees and everything is intertwined. So when something happens in one system, it's reflected in the other and at the end it's almost no manual intervention. So it's faster, more reliable, less human errors and everything.

We try to be as smart as possible and every time we can integrate more, we we do it. And I don't know if we'll mention this later on, but with the AI as well, we have been able to develop a lot of small things. So it's not like we are inventing a new software or something. We're just finding ways to work.

I would say like like and I mentioned with a more lean mindset just to to really focus on added value tasks and everything that we can automate or streamline etcetera, we do it. And this is thanks to the the the fact that we have our own environment that allows a lot of flexibility integration with other system.

Maybe that would not be possible with the tools from the Commission for instance. But for the moment we have this, I would say opportunity to do it like that. OK. Thank you very much, Anna Maria. Inter unit cooperation seems. Crucial to that. How do your teams, HR, finance and administration work together to ensure resources are optimised without compromising quality or staff well-being? While it was a big challenge to me, I have to admit because I'm not an accountant, I have as a more HR background. So when I took up the role in 2022, it was quite a challenge to me to understand how the team work, how to streamline and indeed the processes and indeed to take over the heritage on my previous side of unit or indeed

add more or less say, account of background expertise. So at the very beginning I tried to understand how they worked. It was not easy. I have no shame in saying that because I did not understand. They were very willing to explain, but it was quite technical. And then I embrace a, a more leadership process.

OK, I have to let it go and I trust. So I say, OK, guys, show me what you can do. And we need to advance, we need to improve our procedure, we need to do things smarter and better to save money. And the team was enthusiastic. Christophe and Maria Katerina, the three of them embraced the challenge as well.

The HR team. And they work very closely together. They are working very closely together. And I'm amazed to see the results because I have, as I said in the previous episode, champions that are Christophe and Kiago, but also their team are amazing in, in bringing about new ideas, in reducing waste, as if you use a lean vocabulary.

And indeed, they must work together. Explain myself better. Because you cannot have two separate teams nowadays. If you want to make savings. We need to to act as a whole team and to understand where we can act how. And we have to join efforts at what they did. HR and accounting and all of them are much into improving, into automation, into AI.

And all the actors of the team are very much pretty much active in understanding how we can reduce ways, how we can improve and bring about ideas. I have to admit some of them we cannot implement. We have a legal framework that is the staff regulation, financial regulation, this case, but I'm talking about a unit of nine committed staff members bring about a change. So some are more visible, some less. But thanks to the effort, we improve and we lead by example. So we really bring about a change from again, a kind of administrative running of the accounting and budget on more, be linked to the staff, help the staff doing presentation, doing online trainings, service and just to gather the information, what can we do and how can you

do it better and together. And this worked very well in my opinion. The last few years have seen rapid digitalisation, including the use of AI for process improvement. Christophe, how is CPVO? Integrating digital and AI tools in financial management or reporting. Are there examples where automation has made a measurable difference?

Yes, indeed, the draw. Now, no one can deny the AII think it's everywhere all the time. It's a bit like accounting. We're everywhere all the time. So this is very good because as I mentioned, we need to work with everyone. So as I mentioned, we're, we don't want to reinvent the wheel or go for something very huge because of course you have a significant gain, but it's a lot of resources and time. So we baby steps.

We we try to improve everything that we can. This year, for instance, we improved the way we encode bank statements. So I don't know if it will speak to everyone, but all the money we received from the applicants need to be encoded and cleared with the corresponding invoice. In the past we did it manually, so not one by one, but almost.

So it's a lot of work manual, not a good added value. I mean, when you're doing this, you're not doing something else. So you're always wondering if you could do something else. So it was really cumbersome with a huge risk of errors because sometimes the digits can confuse etcetera. So it was cumbersome with mix of AI, Excel macro.

So specific feature in Excel, for instance, I've been able to transform the file from the bank into one XT file that we just upload in the system and it does everything. Of course we control, we check, but at the end, where maybe it would take us one hour and a half, two hours, now it's 5 minutes. That's amazing.

So yeah, it's, it's a good achievement. So again, it's not fancy, It's not, it's not magnificent. We didn't create a software, but it's just a way to work differently. This is something we wanted to work on a few years ago, but we never had time until the day we say, we say now we'll take the time.

And indeed, what Anna Marie mentioned, it's, it's, it's true. It's a mindset. I think as soon as I arrived in the CPO a few years ago, the team and Marie who was the the accounting officer told me, look, take an eye on the processes. There is no stupid remarks or questions. If you think it's can be improved, just say it and we'll do it. And I think this is the mindset as well that that we have I think in the CPU to always do more with less and this I think more steps.

It's easier in accounting because it administrative repetitive, etcetera. I don't think it's it's necessarily applicable to everyone because all the the jobs are different. But at least for administrative, it works very well. And AI as well has been very useful to, to, for instance, create flows to inform authorizing officer of things to validate if they are not here, it's sent to the backup, for instance.

So it's, it's, it's a really small thing. But at the end it avoids having someone taking the phone and saying, look, can you validate because otherwise we are blocked, it cannot be paid, etcetera. So small things. And we are already looking further for instance, to to have something digital, I would say more digital than now for the reimbursement of experts attending meetings and other other, I would say tools like this to improve a bit everywhere.

Anna Maria, your unit. Also overseas AI initiatives across CPVO. From HR to training, how do you ensure AI is introduced responsibly and that staff are part of the learning process rather than left behind? Well, first of all, we have any AI policy that was approved by our president, that was circulated, shared with all the stuff. So we have a legal basis.

It did not come as a surprise. Then the HR team is very active in proposing AI training for staff and Tiago said in the last episode. The success of the AI training during the summer and he's proposing new trainings. All the management is following dedicated AI training. So we are all on the same board. So we're we're on the same board. So we're not really leaving anybody behind. Then it's true that we are testing the AI. So we don't have really a KPI in place, but what we are documenting is the the innovation that we can document. Let me explain.

So if we are, we are more lean in the procedure and as Christophe just explained, instead of one hour, we take 5 minutes, instead of on one day we take half a day to process information, to process application. I mean it's all the agency involved. So we are all involved in the same process and we are all experimenting in the way in a way.

And what I do expect is next year, so 2026, then we have more KPR. But so far I think the achievements are are really good because we managed to involve all the stuff that is not so easy as a task, but we did. And on the other side we have several sectors active, ongoing, experimenting, talking to each other.

And this to me is already an excellent achievement. In an agency. Where resources? Depend on annual applications and external factors. Precision isn't optimal. It's vital, Christophe. What does financial forecasting look? Like at CPVO. How do you plan when income levels fluctuate from year to year?

Well, I think we were already mentioned a lot. We do what we can. We'd say there is no crystal ball. We cannot as mentioned foresee everything. So we're already trying to be as accurate as possible using historical data, of course scenario based forecasting. So we can have you know like ranges of revenue for instance. And then of course, we monitor closely the the trend and, and the and the actual figures.

Compared to what we we predicted, as mentioned, we cannot control what we cannot control. So if we expected 1,000,000 will receive 800,000, there is not much we can do. Again, it will be useful to fine tune the forecasting for for the future. But what is very useful for us is the reserve as mentioned, because as I said, we can have good years, less good years and then we can, we can take on this reserve.

And the fact is that it's always balanced because we cannot exceed the 50% of of an annual budget. I don't think I mentioned this, but this is the threshold that we have for the reserve. But still we can use this buffer to say, OK, we foresee this revenue this year and we'll see if it's less. We still have this reserve, of course, that we monitor closely because if it decrease, decrease and decrease, at one point we have to do something.

And again, if it increases too much, we have to do something as well. But we still have this reserve. And the fact is that since we are very prudent with expenses and I don't want to say always, but most of the time we never spend everything we expected, we foresaw. So sometimes we have remark from the court of auditors because our budget execution is not high enough I would say.

But on the same time it means that we are very prudent and we don't spend just to spend money. So I think this is as well the the approach of the office and as Andamaya mentioned that we we spend what we need. I think Christophe is very humble because Christophe and Marie and all the team are always behind the scene and I have to recognize the value in forecasting, in assisting the management and staff alike in how to spend the money and how to improve.

So I have to contradict a bit of stuff, but in the positive sense, because they are doing an amazing job being on the scene, that should be recognized. So they are there not to guide, but to give advice, to share the expertise and those to share how to improve the spending of public money, to make the best out of it. And indeed, we are not afraid of the court of Auditors. On the contrary, we're very grateful for their remark because their remarks make us pro, make us work better. And indeed, what we do is we share remarks, we do info session.

And as I said, they they're doing a continuous work behind the scene. And I think what change on the path is really like accounting thing is more visible, is more there, but with another role is not just executing the account, is indeed executing the budget, but really like we are going to offer our advice. Then of course, it's your responsibility as our routing officer by delegation.

But still we can show you expertise and then it's up to you. But we are there to support. And I think also my colleagues feels relieved in a way that if they don't know the reply, they can have some serious advice and then they can take their own decision, including the presidency. But this is what it changed since the last years and I think that was the expertise or the previous accounting thing. Now with Christophe and we continue, the heritage is very important because again, Rome was not built in a day. But if we can advance now is because of the work the colleagues have done before, the heritage we have, and because of the guidance and the freedom of experimenting we have, that we can go mice ad is my opinion.

Thank you, Anna Maria. Thank you, Anna Maria. This also means planning at the human level, making sure staff and budgets are aligned. How do you ensure that long term strategy and daily reality meet? Halfway. This is a tricky question. It's a challenge. Again, I'm not the shame of sharing. That is a everyday challenge because it changes all the time and what I try not only to do my best, but to share my point of view, not just as HR representative, but as a counter representative. So it's a win win as I call it.

So just to evaluate the real needs and as I said in the Last Post podcast, the potential of what we really have in terms of human resources and and what we will need for the future. So we run already an exercise on the future needs with our Vice president. It was more task force and but the view is indeed to focus on what we can offer to our staff considering the current wave or retirements and considering as well the needs for the future. So again, it's a balance, and I have to admit this, it's a bit of a challenge.

It's a challenge to cook because human beings are complex. There is not a black and white solution that I can offer. So I try to do my best with the tools I have, considering AI automation, but also, again, we have to consider the human dimension. So again, Safa is aging people are in a way if you want a 30 year service, of course to be recognized, but as well a bit more tired.

And then what can we offer to them and what can they offer to us? And this must be integrated in the vision to the future. So that's why is again a creativity exercise as well. I believe the respectful exercise because no one must be excluded. But on the same time, I think the transparency. Transparency is very important. So to explain what is expected from the organization, what is expected from the staff member and what are the challenges they're facing.

And then we come together to a solution, to a win, win solution. But nothing is decided beforehand. So is this my role also to ensure that we are aligned, that we're on the same page and how can we look to the future together? And this, I have to admit, is not black and white, is a daily challenge. Thank you, Anna Maria.

Both of you work. At the intersection of people and numbers, a space where efficiency meets purpose. How does this? Collaboration translate into governance the way decisions are made and. Priorities set across the agency. Since I started from the beginning, maybe an Mia could start from this one. Thank you, Chris.

Well, again, it's, it's a challenge, but I think it's a great challenge. I mean, we try to give our to to share our expertise as much as possible and to offer our advice is not to influence because this would be unfair. But we are in a very, I would say, privileged position and for which I'm grateful because the presidency consult us each time a difficult decision or important decision are to be taken. So maybe I am the representative or sometimes they they ask directly to Christophe and Marie, but no decision is taken without prior consultation of my unit. So we offer our advice, but of course, in a way we don't have always a 360° perspective that is normal. So we try to be as much

visionary as possible, so to say to see the future and then to offer solution. But then of course we are not in in the shoes of our had other add of unit or other particular cases. So it's very complex, the situation and I do understand my colleagues because it's not so easy to take, to take strong decision.

But on the other side, sometimes we might appear very strict, but again, because we are the guardians of the budget, we are the guardians of the agency. So what we do is in a good faith to defend, let's say the agency and on the information we have. That's why it's tricky because we try to do the the best as we could, but sometimes it's difficult for us to project into a higher level. And that's why we try to dialogue, to have a a continuous open channel with the colleagues to understand the concern, the fears, the worries and to offer solution according to the financial regulation.

And this, as I said, is tricky because it's not so flexible I would say. Yes, I agree. Maybe to compliment this reply from anemia which is already very thorough. I think transparency is key in everything we do. We never hide anything. It's very transparent for everyone. So we give data. I would say especially in accounting because maybe HR is more that goes a lot more aspect than just figures and and numbers.

But for accounting, when we are asked for decisions or even of course, we, we report to the our administrative council, the idea is that we share things and we say we don't hide. If we have questions and doubts, we raise them and nobody's taken by surprise. And especially for figures of the accounts of the budget, they are presented.

So I think it's clear for everyone where we are going or where we're trying to go. And then I think it helps as well with this transparency. Look at the data, look at the figures. This is why we want to do this and that and not this and that, for instance. So transparency as well, I think is. And that's why of course we we are glad to give advice and we love having people raising questions and asking us about everything linked to accounting. And the same for HR.

Thank you very much, Christophe. And how do you keep teams engaged and motivated when? Resources are tight or priorities shift. Well, again is another challenge. I would say simply by leading by example, but not giving up again and by appreciating our talents and say, look, we are on the same boat together is a challenge for all of us, manager or not.

And let's try to come up with the solutions having in mind, you know, the the overall the objective that is we have to defend the agency. So we have to bring about a positive change. This from my point of view, it works well because all my stuff is engaged, have a very high level of ethics. And then one is about OK, but we work for the agency. Even if, you know, it's sometimes hard, but the agency is, I don't know, it's above all and we all want to do good to make the agency shine.

And this bring about, let's say a collective intelligence. And with collective intelligence we find solution. Of course it takes time. It's not that we, we meet up in, in one hour and we find solution. So we take also the time to brainstorm and insist a lot on this, take our time to brainstorm, to speak to the different teams, to bring about new ideas and also to come for, for example, the unit meeting with collective solutions.

So the ideas are have already been discussed and when they are presented, there is still, there are still options on the table we can implement and then we implement them together. And this works very well. But of course is because I'm surrounded by experts and professional and this is a gift because all my unit is very committed to bring about the change, to bring about improvements and to reflect on how we can go extra miles together.

Thank you. Anna Maria. Looking ahead, what innovations or improvements do you see coming next for CPVO in financial or resource management? Christophe. OK, my turn. I just wanted to to say a few words about the the previous question about motivation etcetera. I think HR is doing a very good work and to keep us all motivated, for instance, there is a lot of initiatives, a lot of trainings.

So I think it's easier to be motivated when you have perspective, when you can project, when you can learn new things as well. And for this, it's of course the fact that we're in the EU institution, but as well the ROH, our team very proactive and and and proposing a lot of things, suggesting a lot of things.

And this, you know, piles up in the working conditions that we have that makes the CPOI agree with Anna Maya place where we want to work. We are proud to work for the CPO. We want to still be proud and keep being proud of working for the CPO. So I think all of these the trainings we have, we have a lot of well-being activities. We have a lot of things like this that helps us as well work together, team building.

We have social days trust. So as well. This is a small things that helps us being together and now stall sufficient time to reply to the to the to your last question about financial resources management, right and the challenges. Well, I don't think there will be something very new in the fact that we'll be still self funded. So we'll have to to still be be prudent with the with expenditure.

But I think this is clear now. There is a lot of things going on on the high level. I would say to rationalise even more of the cost. We have a strategic discussion on the US testing things like that to see if the network of examination offices where we are working with could as well bring savings. We have other ways as well to to bring more added value to the Breeders.

So there is a lot of things going on and for the planning we'll keep doing as we can and trying to to to estimate as accurately as possible everything that we can estimate. And of course we do have fears and up and down. But at the end, globally the trend, I think we can we can more or less forecast it. So I would say this is it.

And then we don't know what the future brings with the worst with the everything going on. AII think we are using it for the moment, but we never know. Maybe there will be no more agency. It will be a robot doing everything. I don't think so. But. I mean, we'll see for for sure. There will be a lot of things and even a lot that I don't think about at the moment. For now, CPVO.

Is the place to be. Yes, I did what I think at least for financial management and the child management. What I do see for example with the I mentioned this wave of retirements, we could consider considering not replacing some of the posts doesn't mean all the posts thanks to automation AI, but we need a human being. We need the workforce.

So it's not that we are going to fire people. This is absolutely not On the contrary me I'm I'm really focused on talents on people. I do believe that there is still a lot to explore on talents of our staff. But then indeed what we could do to reduce expenses is to think about the post that will became vacant because of retirement.

And then again, the question is do we really need to replace them or not. And this or not has to be complemented by a reasonable let's say planning. It's not just OK, we're using OK, but how I mean it, it test to be well defined with the plan, with the project and so on. But our stuff is our value.

So of course we count on our stuff and we rely upon a lot our stuff. Because for me, Anna Maria, our stuff is our future, the current and the future one. Then if we can be more ambitious and do more with less, we will. But still this is strategic decision that must be taken and really a plan should be drafted to be on the right, let's say side. But I don't believe the EI will replace people. This ocean or AI will empower our staff. This for sure.

This is what I believe in. Thank you. Anna Maria if you could summarise CPVOS philosophy in one line. How would you describe it? This is not so easy. CPV was follows in one line. There is plenty that we can say in one line. I think he's lean. We are lean. We try to get rid of the so-called waste in a good way, and we are engaged. There is no lean without engagement. We're engaged to do better, be smarter, to cost less to the Breeders, to be greener.

So this for me is all lean and engaged. And I think this is a good summary of our philosophy. I wanted to say to do more with less, so it's more or less what what I mentioned. Thank you very much, Christophe. Anna Maria, thank you so much for sharing your vision. This conversation shows. How at CBVO?

Efficiency isn't about doing less, it's about doing better with precision, creativity, and collaboration. Thank you both for joining us today and for our listeners out there. See. You on the next episode. Thank you. Thank you, Deirdre. Thank you. Bye. Bye.

Episode 6: The Hidden Engine – Accounting at CPVO

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