This article is written by our partner, Atlar
Corporate debt is among the most useful tools a company has, but only when it is managed well. Whether you are tracking external bank loans and credit facilities or managing intercompany lending across subsidiaries, good debt management protects liquidity, controls costs, and supports growth. This guide covers what finance and treasury teams need to know about both external and internal (intercompany) debt: the core processes, the common pitfalls, and the practices that keep you in control.
Corporate debt management is the process of tracking, organizing, and optimizing a company’s borrowing across all debt instruments and entities. It encompasses everything from recording loan terms and monitoring repayment schedules to calculating interest obligations and assessing the impact of debt on cash flow.
For finance and treasury teams, debt management sits at the intersection of several core functions: cash management, cash flow forecasting, financial reporting, and risk management. The debt a company carries directly affects its liquidity position, its ability to invest, and its obligations to lenders and other stakeholders.
In practice, corporate debt falls into two broad categories:
Both types require careful tracking, documentation, and management, but they come with distinct challenges. External debt is governed by covenants and banking relationships. Internal debt is governed by transfer pricing rules, tax regulations, and the need for arm’s-length terms. This guide covers both in depth.
Debt is a fact of life for most companies of any size. How a company manages it shapes its liquidity, its borrowing costs, and its standing with lenders and investors.
Cash flow visibility
Debt repayments, both principal and interest, are among the largest and most predictable cash outflows a company faces. Without a clear picture of upcoming obligations across all loans and entities, treasury teams risk cash shortfalls, missed payments, or inefficient allocation of surplus cash. Integrating debt data into your cash flow forecasting process is essential for accurate liquidity planning.
Cost optimization
The cost of debt is not fixed. Interest rates fluctuate, hedging instruments expire, and refinancing opportunities arise. Finance teams that actively monitor their debt portfolio can identify opportunities to reduce borrowing costs, whether by refinancing at a lower rate, restructuring repayment schedules, or paying down high-cost debt with surplus cash.
Covenant compliance
Most external debt comes with financial covenants—conditions the borrower must meet, such as maintaining certain leverage ratios or minimum cash balances. Breaching a covenant can trigger penalties, accelerated repayment, or even default. Proactive monitoring ensures you stay within limits and can act before issues arise.
Regulatory and tax compliance
Intercompany loans, in particular, are subject to scrutiny from tax authorities. Transfer pricing regulations require that intercompany lending be conducted at arm’s length, that is, the interest rate, repayment schedule, and other terms must reflect what unrelated parties would agree to in comparable circumstances. Failure to comply can result in significant tax adjustments and penalties.
Financial reporting and audit readiness
Accurate debt records are a prerequisite for reliable financial reporting under standards like IFRS and GAAP. Auditors review loan documentation, interest calculations, and repayment histories. Maintaining a centralized record of all debt instruments streamlines the audit process and reduces the risk of misstatements.
Before diving into management practices, it helps to understand the main types of debt that finance and treasury teams typically deal with.
| Debt instrument | Description | Typical use |
|---|---|---|
| Term loan | Bank loan with a fixed repayment schedule. Bilateral (one lender) or syndicated (several). | Acquisitions, capex, general corporate purposes |
| Revolving credit facility (RCF) | Credit line drawn, repaid, and redrawn up to a set limit. A committed liquidity backstop. | Working capital, liquidity buffer |
| Corporate bond | Debt security issued to investors, typically with a fixed coupon and maturity. | Large-scale, long-term financing |
| Senior secured note | Bond backed by specific assets, with priority over unsecured creditors in default. | Leveraged finance, PE-backed companies |
| Unsecured bond | Bond backed by the issuer’s general creditworthiness, not specific collateral. | Investment-grade issuers |
| Convertible bond | Bond convertible into equity under set conditions, blending debt and equity. | Growth-stage companies, lower-cost debt |
| Bridge loan | Short-term financing until permanent funding is arranged. | M&A transactions, IPO preparation |
| Intercompany loan | Loan between two entities in the same corporate group. | Internal capital allocation, subsidiary working capital |
A key distinction in any debt portfolio is between fixed-rate and variable-rate (also called floating-rate) instruments.
Fixed-rate debt carries a set interest rate for the life of the loan, providing cost certainty. The borrower knows exactly what each interest payment will be, which simplifies cash flow forecasting.
Variable-rate debt is tied to a benchmark rate plus a margin (or spread). The benchmark rate is a reference interest rate published by a central authority or derived from market transactions. The most widely used benchmarks in corporate lending are:
The interest cost on a variable-rate loan fluctuates as the benchmark rate changes. For example, a loan priced at three-month EURIBOR + 2.00% will see its interest rate reset every three months based on the prevailing EURIBOR rate. If the three-month EURIBOR is 2.50%, the all-in rate is 4.50%. If EURIBOR moves to 3.00% at the next reset, the all-in rate becomes 5.00%.
Many companies hold a mix of fixed and variable-rate debt. The balance between the two, and the use of hedging instruments to manage rate exposure, is a fundamental decision in debt management.
Companies with variable-rate debt often use hedging instruments to protect against adverse interest rate movements. The most common types are:
Tracking hedging instruments alongside the underlying debt they relate to is important for accurate interest expense forecasting, hedge accounting under IFRS 9 or ASC 815 (US GAAP), and understanding the company’s true interest rate exposure.
External debt management means keeping full visibility and control over your borrowing from banks, bondholders, and other third-party lenders. For companies with several banking relationships, entities, and currencies, that is both operationally demanding and strategically important.
Effective debt management begins before the first loan is drawn. Treasury teams work with the CFO, FP&A, and sometimes external advisors to determine how much capital the company needs, for what purpose, and over what time horizon. These inputs drive the choice of instrument.
Key considerations at this stage include:
Once the instrument type is selected and lenders are identified, the terms are negotiated and formalized in legal documentation. For a bank loan, this typically includes a loan agreement (or credit agreement) and any related security documents. For a bond, it involves an indenture (the legal contract between the issuer and a trustee who represents bondholders) and an offering memorandum (the disclosure document provided to prospective investors).
Key terms to document and track include:
This documentation is the single source of truth for each debt instrument and should be stored centrally where the treasury and finance team can access it.
With documentation in place, the next step is to register every loan in a centralized debt register—whether that’s a dedicated module within a treasury management system (TMS), an ERP system, or (for smaller portfolios) a well-structured spreadsheet. Without this, companies that borrow from multiple banks often end up managing each relationship through separate portals, each with its own statement formats and reporting cycles, making it difficult to assemble a consolidated view of total debt and upcoming obligations. A centralized register with multi-bank connectivity eliminates this fragmentation.
For each instrument, the register should capture:
This register becomes the foundation for everything that follows: interest calculations, cash flow forecasting, covenant monitoring, and stakeholder reporting.
Once loans are registered, the treasury team must track ongoing interest obligations accurately. For fixed-rate debt, this is straightforward—the interest amount is known in advance. For variable-rate debt, interest calculations require more attention.
The key inputs to a variable-rate interest calculation are:
For example, a €10 million loan at three-month EURIBOR + 2.00% with an Actual/360 day-count convention and a 91-day interest period would be calculated as: (Principal × (EURIBOR + Margin) × Days in Period) / 360.
Automating these calculations, rather than relying on manual spreadsheet updates, reduces errors and ensures that your cash flow forecasts always reflect the latest rate environment.
Debt servicing costs, comprising both interest payments and principal repayments, are often among the largest line items in a company’s cash outflow forecast. Integrating debt data directly into your cash flow forecasting model ensures that upcoming obligations are accurately reflected in your projected cash position.
In a 13-week cash flow forecast, debt-related outflows should typically appear as distinct line items, separating interest payments from principal repayments, within the outflow section of the forecast. This granularity helps treasury teams identify periods where debt payments coincide with other large outflows (such as payroll, tax, or supplier payments) and take action to ensure sufficient liquidity.
For companies with variable-rate debt, forecasting also involves projecting future interest costs under different rate scenarios—typically a base case, an upside scenario (rates fall), and a downside scenario (rates rise). The impact compounds quickly at scale: a 100 basis point increase in EURIBOR on a €50 million floating-rate loan increases annual interest expense by €500,000. This kind of scenario analysis helps treasury teams understand rate sensitivity, inform hedging decisions, and prepare accordingly, particularly when hedging instruments are not tracked alongside the underlying debt, making net exposure hard to assess.
Financial covenants are conditions embedded in loan agreements that require the borrower to maintain certain financial metrics. Breaching a covenant, even a technical breach with no immediate financial consequence, can erode lender confidence, trigger reporting obligations, and in severe cases lead to acceleration of repayment or default.
The most common financial covenants include:
Monitoring covenants requires up-to-date financial data, not just from your debt register but from your accounting and treasury systems as well. Companies typically test covenants quarterly, aligned with their financial reporting cycle. A centralized platform that combines debt data with real-time cash positions and financial metrics makes this significantly more manageable.
Best practice is to track covenant headroom—the difference between the actual metric and the covenant threshold—on an ongoing basis, rather than only at test dates. This early warning system gives treasury teams time to take corrective action (such as reducing discretionary spending, accelerating receivables, or negotiating a temporary waiver with lenders) before a breach occurs. It’s worth noting that non-financial covenants, such as negative pledge clauses that can be triggered by corporate restructurings or asset disposals, are a common and often overlooked cause of default events, and deserve the same proactive tracking.
As loans approach maturity, treasury teams must plan for repayment or refinancing well in advance. A maturity profile, showing when each debt instrument comes due, is an essential planning tool.
Key considerations when managing maturities include:
Maintaining banking relationships: Regular communication with lenders builds trust and can lead to more favorable terms.
CFOs, board members, auditors, lenders, and investors all need visibility into the company’s debt position. Effective debt reporting should clearly present:
A well-structured debt report, updated regularly and easily accessible, builds confidence among stakeholders and supports better decision-making. Modern treasury platforms generate these reports from centralized data, reducing the manual effort of assembling information from multiple sources.
An intercompany loan is a loan between two entities in the same corporate group, for example a parent funding a subsidiary or one subsidiary lending surplus cash to another. The lender books a receivable and recognizes interest income; the borrower books a payable and interest expense. The concept is straightforward, but managing intercompany debt brings regulatory, tax, and operational complexity that external debt does not.
Intercompany loans serve several important purposes:
Before establishing an intercompany loan, consider whether it’s the most appropriate mechanism. Alternatives include equity contributions (injecting capital rather than lending it), dividend distributions (moving cash between entities by distributing profits), management fees (charging one entity for services provided by another), or having the subsidiary borrow externally. Each option carries different implications for tax, balance sheet structure, and regulatory compliance.
Key questions to evaluate:
Transfer pricing regulations in most jurisdictions require that intercompany loans be structured at arm’s length. The OECD’s Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations provide the international framework, and most countries have adopted some version of these rules.
Setting arm’s-length terms involves:
Interest rate benchmarking
The rate charged on an intercompany loan should be comparable to what a third-party lender would charge the borrowing entity, taking into account the borrower’s credit profile, the loan amount, tenor, currency, and whether the loan is secured. Common approaches include referencing published benchmark rates (e.g., EURIBOR or SOFR) plus an appropriate credit spread, or using transfer pricing databases that compile comparable loan transactions.
Repayment schedule and maturity
Define a realistic repayment schedule that aligns with the borrower’s expected cash flows, and set a defined maturity date. Tax authorities may challenge loans with indefinite terms or no realistic repayment prospect as lacking economic substance, potentially reclassifying them as equity contributions, which would eliminate interest deductibility for the borrower and convert interest income to dividend income for the lender.
Security
Decide whether the loan will be secured against specific assets. This decision affects the arm’s-length interest rate, since secured loans typically carry lower rates than unsecured ones.
Formal documentation is the foundation of tax compliance and audit readiness for intercompany loans. Tax authorities can, and regularly do, reclassify the loan as an equity contribution.
The loan agreement should include, at a minimum:
The agreement should be signed by authorized representatives of both entities and stored in a centralized document management system alongside the group’s transfer pricing documentation.
Both entities must record the loan on their books: the lender as a receivable, the borrower as a payable. Interest accruals should be calculated and posted at the agreed intervals (typically monthly or quarterly), using the same methodology and rates on both sides.
Regular reconciliation between the lender’s and borrower’s records is essential. Discrepancies, which commonly arise from timing differences in posting, different FX rates used for translation, or simple data entry errors, should be identified and resolved promptly. Ideally, this happens as part of a monthly close process rather than being left to quarter-end or year-end.
For group financial consolidation, intercompany loans and the associated interest income and expense must be eliminated. The receivable on the lender’s books and the payable on the borrower’s books should net to zero. Discrepancies at consolidation are one of the most common causes of delayed month-end closes in multi-entity groups.
Intercompany loans are not “set and forget.” Treasury teams should continuously monitor:
Spreadsheet reliance
Many finance teams still track intercompany loans in spreadsheets, which leads to formula errors, version control problems, and a lack of audit trail. As the number of entities and loans grows, the risk of misstatement increases.
Mismatched balances
The lender and borrower frequently record different balances for the same loan, which surfaces during reconciliation and can delay the month-end close. Establishing a single source of truth, where both entities reference the same loan record, is the most effective way to prevent this.
Non-arm’s-length terms
If the interest rate or other terms on an intercompany loan don’t reflect what unrelated parties would agree to, tax authorities may adjust the taxable income of one or both entities. This risk increases when rates are set informally or not updated to reflect changing market conditions. Regular benchmarking against published reference rates and comparable third-party transactions is essential.
Missing or incomplete documentation
Without a formal loan agreement specifying all material terms, tax authorities may reclassify the loan as an equity contribution. Standardized loan agreement templates, enforced consistently across the group, help prevent this.
Untracked FX exposure
When intercompany loans are denominated in a currency other than the functional currency of either entity, exchange rate movements can create significant unrealized gains or losses. Without centralized tracking, these exposures may go unhedged and unmonitored, introducing volatility into both entities’ financial results.
Poor visibility into cash impact
Intercompany debt obligations are sometimes excluded from the group’s cash flow forecast, creating blind spots in liquidity planning.
These practices apply to both external and intercompany debt, reflecting the approaches used by treasury teams managing complex, multi-entity debt portfolios.
Centralize your debt register
Keep all debt, external and intercompany, in one register. It underpins accurate interest calculations, forecasting, covenant monitoring, and audit readiness (see Step 3 under Managing external debt).
Automate interest and repayment calculations
Manual calculations are a persistent source of error, especially for variable-rate loans whose rate resets periodically. Automating them, and feeding the results into your forecast, keeps projections in step with the latest rates. For EURIBOR-linked loans, that means pulling in the daily rate publications automatically.
Integrate debt data with cash flow forecasting
Treat debt servicing as a first-class line item in your forecast, for both external and intercompany debt (see Step 5 under Managing external debt).
Use scenario analysis for rate exposure
For material variable-rate debt, model the effect of a 50, 100, or 200 basis point move in your benchmark rate on interest expense and cash outflows. This informs hedging decisions and gives the CFO and board a clear read on rate sensitivity.
Maintain rigorous documentation standards
Every loan needs a signed agreement on file, with all amendments, waivers, rate changes, and covenant calculations stored centrally. For intercompany loans, this underpins transfer pricing compliance; for external debt, it supports covenant reporting and lender communication.
Conduct periodic portfolio reviews
Review the full portfolio at least quarterly. Check whether refinancing could lower costs, whether the fixed and variable mix still fits the environment, whether intercompany terms still reflect market rates, and whether covenant headroom is sufficient. Involve treasury, FP&A, and tax.
Build stakeholder-ready reporting
Standardize reporting on total debt, maturity profiles, interest costs, covenant metrics, and currency exposure, for the board, lenders, auditors, and investors. A centralized platform generates these from live data.
Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. Click below to register and connect with Treasury professionals worldwide
This article is written by our partner, Atlar
There is a version of treasury that costs money and a version that makes money. Most private equity (PE)-backed companies are running the first version. The gap between the two is measurable in EBITDA, exit multiple, and management hours, and it is closable within the hold period if you approach it correctly.
Treasury in an independent company is a steady-state function. In a PE-backed company, the calculus changes on almost every dimension.
A mid-market PE hold typically runs 5–7 years, and every finance infrastructure decision needs to generate returns within that window. The strategies PE firms use to build value also create specific treasury stress points that an independent company rarely encounters.
Buy-and-build
A company executing an active acquisition strategy can absorb dozens of entities in a short period of time. One Atlar customer completed more than 60 acquisitions in under six months. Each acquired entity arrives with its own banking relationships, payment processes, and local finance team. The centralised group finance function is expected to have visibility across all of it, but in practice they often don’t: access to acquired bank accounts is held locally, not handed over immediately, and integrating those accounts into the group’s house bank takes months. Sensitive operational processes, like customer billing, may run through the acquired entity’s existing accounts, creating reluctance to touch anything that risks disrupting revenue.
The result is a group running its capital allocation decisions on incomplete information. Without a consolidated view of cash across all entities, the CFO cannot confidently answer whether the business has the liquidity to fund the next acquisition, service debt, or accelerate a growth initiative from its own balance sheet — or whether it needs to draw on a credit facility to do so. Millions in excess cash sitting across acquired entity accounts that goes undeployed, while the group may simultaneously be paying interest on revolving credit it did not need to draw. A bank-level cash pool does not solve this; it only covers the house bank and primary accounts, not the fragmented estate of acquired entity accounts sitting outside it.
The right response is not to force all accounts into a single bank immediately. It is to connect everything to a single visibility layer first, illuminate the full cash position in real time, and then work through consolidation progressively. Critically, the platform needs to be able to connect new accounts at least as fast as the business acquires them. If it cannot, it becomes a bottleneck on the M&A strategy itself.
International expansion and structural change
As companies enter new markets, banking relationships tend to be established based on what is convenient locally rather than what is scalable for the group. A country manager or local finance lead opens an account with a regional bank that works well for local payroll and supplier payments. The central treasury team is often not involved in that decision, and sometimes cannot be: access to the account may require a locally-issued bank token, or a national identification number held by someone in-country. The central team ends up with accounts on their balance sheet that they cannot see into directly.
The result at group level is the same fragmentation problem as buy-and-build, compounded by the fact that the local teams did not intend to create an opacity problem — they were solving a practical need. Carve-out situations add further pressure: TSA clocks give finance teams 90–180 days to stand up treasury operations that were previously handled by a parent company, by which point the combination of new entities, new geographies, and inherited banking relationships can be significant. The common thread across all of these scenarios is connectivity. Every new entity, geography, or structural change adds accounts that need to be visible to the central team before any active treasury management can happen.
Lean teams and cash efficiency
Operating partners will not approve a treasury headcount build-out. The expectation is that the existing finance team delivers treasury-grade output without a dedicated treasury organisation. That constraint has a direct cash flow dimension that is often underweighted in the business case for treasury infrastructure. A well-run treasury function does not just reduce cost, it actively generates return. Cash that is not pooled and put to work sits idle in operating accounts earning nothing, when it could be deployed into money market funds or short-term fixed deposits. The amount varies by company size and business model, but the return is material: at Mangopay, an Advent International portfolio company, €20M of excess cash was identified and put to work, generating 6.1x ROI on the technology investment from yield alone, flowing directly into free cash flow. It is an investment return the business is either capturing or not, and it compounds across the hold period.
The challenge underneath the others
Treasury is rarely the only finance challenge in a PE-backed company, but it is often the one that sits underneath the others. The cost of poor treasury infrastructure is not just operational friction. When cash reporting is slow, the CFO and operating partner are making capital allocation decisions on incomplete information. When idle cash is not being actively managed, the business is carrying an implicit financing cost on every growth initiative it funds from its own balance sheet. When payment processes are manual and approval chains are informal, the finance team’s time is consumed by execution rather than analysis. The cumulative effect is a business that is not operating at full capacity — one that may have to deprioritise investments, defer initiatives, or delay decisions simply because the financial infrastructure cannot keep pace with the strategic agenda. Treasury is not a back-office function in a PE-backed company. It is load-bearing infrastructure for the value creation plan.
Finance leaders who recognise the gap typically look at three options. Each has a structural problem.
Spreadsheets and bank portals work until the first acquisition or the first new geography or when you hit 3+ banks being used. Then they fail suddenly, usually at the worst possible moment.
Enterprise treasury management systems built over the past two to three decades were designed for a specific user: a dedicated treasury professional at a large corporate, managing a full treasury function with analysts, IT support, and years of platform experience. These systems reflect that complexity. They handle multi-bank global connectivity, sophisticated hedging programs, and derivative accounting across hundreds of entities. For a Global 500 group treasurer with a team behind them, that depth makes sense.
For a PE-backed mid-market company, it is overkill in the wrong direction. The platforms are built to be operated by specialist teams to warrant investment, and in practice they require long-standing treasury expertise just to navigate day to day. A CFO, controller, or head of finance without a treasury background will struggle to extract basic value from them, let alone configure and run them independently. Most PE-backed companies at the €50M–€500M range do not have that profile in-house, and hiring for it takes time they do not have.
The economics compound the problem. A typical enterprise TMS takes 12–18 months to implement. Payback periods from go-live run two or more years. A company that signs a contract in year one of a 5–7 year hold reaches positive ROI around year four at the earliest. The financial benefit accrues almost entirely to the next owner. No operating partner approves that business case, and no CFO should propose it.
The problem compounds if there is no treasurer in post. The conventional sequence — hire the person, let them select the platform, run the implementation — adds six or more months of recruitment and onboarding before implementation even starts. In a compressed hold, that sequence can consume three to four years of the value creation window before it produces anything.
The rational alternative is to invert the sequence. Deploy treasury technology first, operated by the existing finance team. Unlock cash visibility, payment automation, and yield on idle balances quickly, within the first 60–90 days of the hold. Bring in a treasurer later, as the business scales, to augment a functioning infrastructure rather than build one from scratch. Technology-first treasury is not a compromise. In a PE context, it is the correct order of operations.
The reason technology-first treasury is now viable — and wasn’t five years ago — is a convergence of three shifts.
Connectivity as a managed service
The foundational barrier has always been bank connectivity. Getting a treasury platform to talk to multiple banks across multiple countries required IT resources, middleware vendors, and ongoing maintenance. The model that changes this treats connectivity as a fully managed service: the platform owns the connectivity layer, maintains the bank relationships, and handles protocol management. The customer’s IT team is not in the critical path. When a portco acquires a new entity or opens accounts in a new country, connecting them is a configuration task, not a project. That distinction matters enormously in a buy-and-build strategy where the pace of acquisition cannot wait on implementation timelines.
ERP-native integration
Treasury and ERP operating on the same live data layer, rather than periodic imports and exports, means the finance team stops reconciling backwards and starts managing forwards. Payments initiated in the ERP are visible in the treasury platform before they clear. Expected receipts match against incoming bank transactions automatically. The month-end close shrinks. Cash reporting assembles itself.
Finance AI agents grounded in live data
Most finance teams experimenting with AI today are using disconnected tools: generic AI assistants fed spreadsheet exports, working from data that is always incomplete and always stale. For treasury this is a structural limitation. Cash positions decay in hours. An agent that cannot see all your banks simultaneously, or lacks ERP context to know what payments are due tomorrow, produces answers that are wrong in the ways that matter most.
AI agents operating natively on live banking and ERP data simultaneously are a different category. A concrete example: a Daily Cash Position workflow runs automatically each morning. Before the CFO opens their laptop, it has already pulled balances across every account and entity, flagged unexpected transactions, matched settlements against expected receivables, calculated liquidity headroom by currency against treasury policy minimums, and drafted specific sweep proposals where thresholds have been breached.
The human-in-the-loop is central to the design. Routine tasks run autonomously. High-stakes actions — executing a sweep, releasing a payment batch, approving a transfer above a material threshold — surface to a named approver as a specific recommended action requiring explicit confirmation. The AI prepares the decision. The human executes it. Every action is logged with a full audit trail.
These workflows are configured in plain language by the finance team itself, with no IT involvement and no change orders. A portco that starts with Daily Cash Position can add a covenant headroom monitor or a weekly board cash commentary as the business grows. Each agent operates within explicitly defined, auditable data scopes. That is the answer to the governance question every operating partner and audit committee will raise.
Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. Click below to register and connect with Treasury professionals worldwide
This article is written by Nadia Callaghan
A Treasury Management System implementation is one of the most meaningful changes a treasury function can undertake. It affects how liquidity is monitored, how data is captured, how controls operate, and how decisions are made. While technology is central, the real determinant of success is how well the treasury team is prepared. A TMS will not automatically fix process gaps or unclear responsibilities; it will simply make them more visible. Preparing the team properly ensures the system supports a stronger, more efficient operating model from day one.
The first step is helping the team adopt a practical, forward‑looking mindset. Treasury professionals are used to running daily operations, often with manual workarounds and legacy processes. A TMS implementation requires them to step back and think about how processes should work in a modern environment. This shift is not about being visionary; it is about being intentional. The team needs to understand that automation, embedded controls, and structured workflows will replace many of the tasks they currently perform manually. When people understand why the change is happening and how it will improve their work, they engage more constructively throughout the project.
With the mindset in place, the team should document its current processes clearly and honestly. This is not an exercise in identifying faults but in understanding the baseline. Treasury needs to know how daily cash positioning is performed, how forecasting inputs are collected, how reconciliations are handled, and where exceptions typically arise. This mapping helps identify what the TMS must address and what internal improvements should be made before configuration begins. A system can only perform well if the underlying processes and data are stable.
Once the current state is understood, the team can define the future‑state operating model. This is where preparation becomes practical. Treasury should outline how liquidity will be managed, how forecasting will flow through the organisation, how approvals will work, and how exceptions will be handled. The future state should reflect best practice and be achievable within the team’s capacity. It is important to avoid simply replicating existing processes in a new system. A TMS implementation is an opportunity to streamline workflows, strengthen controls, and reduce manual effort. A clear operating model provides direction for configuration and helps avoid unnecessary rework later.
Clear roles and responsibilities are essential. A TMS implementation exposes ambiguity quickly, especially when decisions need to be made at pace. Treasury should define who owns daily cash positioning, who validates bank data, who manages exceptions, who maintains master data, and who approves liquidity movements. This clarity helps the project run smoothly and prepares the team for how their roles will evolve after go‑live.
Training is another practical component of preparation. Treasury teams benefit from early exposure to the system, even at a conceptual level. Understanding how modules work, how workflows are structured, and how data flows through the TMS helps team members participate more effectively in design workshops. Early training reduces uncertainty and builds confidence, which is particularly important for team members who may be apprehensive about new technology.
Data preparation is often underestimated but is critical to a successful implementation. Treasury should ensure bank account information, entity structures, counterparty lists, forecasting categories, and approval hierarchies are accurate and up to date. Clean data reduces defects, accelerates configuration, and ensures the system reflects the organisation’s true liquidity position.
Throughout the project, communication keeps the team aligned and reduces stress. Regular updates on timelines, decisions, risks, and upcoming changes help people feel informed and involved. When the team understands what is happening and why, they are more resilient during busy phases of the implementation.
Finally, preparing for the first ninety days after go‑live ensures a smoother transition. Treasury should expect higher exception volumes, user questions, and minor process adjustments. A structured hypercare plan, combined with ongoing training, helps the team settle into the new system and begin realising its benefits quickly.
Preparing the treasury team is not a preliminary step; it is the foundation of the entire TMS implementation. When the team is ready, the system enhances visibility, strengthens controls, reduces manual work, and supports better decision‑making. A well‑prepared team turns a complex project into a practical, manageable, and ultimately successful transformation.
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By Alexander von Schirmeister,
CEO at Nomentia
A bank portal still works. The ERP still produces data. A spreadsheet still calculates a forecast. A payment approval workflow still moves from one person to the next. Reports still reach the CFO, even if they arrive later than expected. From the outside, treasury appears to function. Inside the process, finance teams know exactly how much effort is required to keep that appearance of control intact.
Modern treasury cannot rely on disconnected systems because the questions it needs to answer are no longer isolated. Cash visibility depends on bank data, account structures, ERP information, payments in progress, forecast inputs, intercompany flows, financing activities, and exposures. Liquidity planning depends on operational data from the business, but also on treasury assumptions, market conditions, working capital movements, and funding plans. Risk management depends on reliable exposure data, but also on trade execution, hedge documentation, limits, reporting, and accounting. If each part of this picture sits in a different place, the treasury team becomes the integration layer.
That integration work rarely surfaces. It lives in copy-and-paste routines, manual file checks, email reminders, reconciliation notes, spreadsheet tabs, and individual memory. It is also where most treasury management challenges quietly begin.
Disconnected systems create time loss because data has to be gathered before it can be analysed. They create duplicated work because teams maintain local trackers even when central tools exist. They weaken cash visibility because the latest view may depend on which bank file has arrived or which entity has responded. They weaken controls because exceptions are harder to identify when workflows are not connected.
The CFO does not usually see the process friction. The CFO sees the answer. If the answer is late, inconsistent, or hard to explain, confidence falls. Senior leadership needs reliable responses to simple but high-stakes questions: How much liquidity is available? Which cash flows are expected? Where is working capital tied up? Are internal payments efficient? Which exposures are material? Are guarantees, hedges, and commitments under control? These questions cannot be answered well when the data behind them has to be rebuilt every time.
The 2026 Nomentia Treasury and Cash Management report highlights that many treasury teams are in a transitional phase. They have moved beyond purely manual treasury, but still rely on multiple systems and partial automation. The pattern is familiar: the organisation has invested in technology, yet treasury still spends too much time reconciling information and validating reports. The issue is not that systems are missing. The issue is that they are not connected enough to support the pace of decision-making.
Disconnected systems are especially risky in three areas.
The first is visibility. If cash positions, transactions, forecasts, and payment statuses are not consolidated, treasury may see parts of the picture but miss the direction of movement. A balance report can show where cash is today, but it does not explain whether the position is temporary, restricted, exposed, or needed elsewhere in the group. Visibility without context can create false comfort.
The second is control. Treasury policies often look clear on paper, but control depends on how processes actually run. Who can approve a payment? Which entities have followed the forecast process? Which exposures have been validated? Which guarantee is close to expiry? Which hedge relationship needs attention? When workflows are disconnected, control becomes dependent on manual follow-up. That may work when volumes are low, but it becomes unreliable as banks, entities, instruments, and reporting expectations increase.
The third is decision speed. In volatile markets, delayed answers are not neutral. A late forecast can affect funding decisions. A delayed exposure view can affect hedge timing. A slow payment status check can affect supplier confidence. A late view of guarantees or credit line usage can affect working capital decisions. Treasury does not need real-time data for every decision, but it does need enough connected information to avoid making decisions with yesterday’s understanding.
A modern treasury management system should not be judged only by feature breadth. The more important question is how well it reduces the gaps between systems, data, workflow, and reporting. A strong setup connects bank information, ERP data, payment processes, cash forecasting, risk workflows, analytics, and audit trails into a reliable operating model. That does not mean every company needs every module at once. It means the architecture should support growth without forcing the team to rebuild its processes every time complexity increases.
Most people researching a TMS today will start with a web search or ask Copilot, Gemini, or ChatGPT. The answer they get back is usually a feature list. That’s not wrong, but it’s incomplete. A good treasury management system helps finance teams centralise cash, payments, forecasting, risk, controls, and reporting so they can make better liquidity and financial risk decisions with trusted data. Features are how it gets there. That’s the distinction worth keeping in mind when evaluating whether your current setup is still fit for purpose.
The path away from disconnected systems does not always require a large replacement project. In many organisations, the better approach is to identify the most painful manual bridges first. Where does treasury re-enter data? Where does the team wait for local input? Where do reports need manual explanation? Where are approvals outside the system? Where is the same number calculated in different ways? These questions show where fragmentation is creating the most business risk.
Connected systems create reliable answers. They reduce the manual work behind cash visibility, improve the quality of cash flow forecasting, and support stronger controls and compliance. They help the CFO understand not only what the numbers are, but what they mean for liquidity, risk, and action. Disconnected systems may still function. But they make treasury work harder than it should, and confident decisions harder than they need to be.
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