Background: “You want to reduce the chances of losses due to foreign exchange movements; First you need to set up a controlled treasury environment”
Once upon a time, I was fortunate enough to have a senior Treasury position in a fast-growing company. My first contact with the company was as a consultant, advising on foreign exchange risk management, part of the pillar we’ve called profitability support (see the 1st article – link below). As the company had become more international, the possibility of significant losses due to foreign exchange rate movements had increased to an uncomfortably high level for management.
My advice as a consultant was ‘Fine, you can do this. It makes sense. Treasury functions tend to start when the company has about $ 200 M in sales, and you have that. But having a more active treasury will increase the number and value of financial transactions and associated high-value payments to be done. Your current setup and processes are not well controlled. Frauds and material errors are possible and could become more likely. You first need to change this”. Saying yes would turn their basic treasury into a control-oriented one. They did agree, and I was appointed to set that better treasury up.
The situation was unsatisfactory both from solvency and profitability support perspectives.
When I first arrived, the Treasury function had one employee. He would manage head office’s borrowing and lending needs and provide cash to or from subsidiaries based on monthly reports prepared by the operations (cash forecasts) or as requested. The forecasts were not normally challenged, and it was clear to me from the subsidiaries’ accounts they were sitting on a lot of cash. This was happening at the same time as the company had significant borrowings at the parent level, where the cash could be used to reduce debt, and where the cash was providing no return to offset the inefficient borrowing. The situation was unsatisfactory both from solvency and profitability support perspectives.
Everything was seen through the lens of accounting
It was also clear that the current Group Treasurer (by title) lacked significant treasury skills and could not influence the CFO to do the basics. One example was that when funds were provided to the companies, no repayment date was set. Borrowings and loans were treated the same way as non-repayable payments and collections (accounts payable and receivable.) Since no date for repayment was set, no foreign-exchange hedging could take place (a specific date for the return cashflow is needed to protect the company against FX risk). But management was fine with this because the accounting treatment on accounts payable and receivable was that they were long-term in nature, not planned to be repaid, and therefore not regularly revalued. Therefore not causing a volatile foreign exchange gain or loss. This was acceptable from an accountant’s point of view. From a treasury perspective, it was not. Providing money at one exchange rate and receiving it back at another would cause a real economic exchange gain or loss. It was a risk that was not tracked and would not show up until it was too late to be managed.
We’ll discuss this difference between treasurers and accountants more in a later article. Unlike in this case study, most Treasury and Accounting departments get on well together. However, in my experience, both frequently struggle to explain WHY they are different. It’s important both for accountants and CFOs directly to understand this difference better (CFOs usually come from an accounting background.) It’s equally important for non-Treasurers to understand the differences so that they can get most out of their interactions with each.
Note that neither is right or wrong; they are just different, like someone who is Japanese and another American. Nobody should confuse one for the other.
Productivity and management strategy impacts were immaterial
All of this was typical in a basic treasury. Accounting was understood, while treasury was not. Solvency was not optimised, profitability not supported and productivity and management strategy impacts immaterial.
It was difficult
I’d love to tell you that the transition was smooth, but it was not. This highlights why moving to even a ‘simple’ controlled treasury operation is not a no-brainer or easy to implement. It is difficult and helps explain why moving even further from an operational to a strategic treasury is so hard and, therefore, happens so rarely.
People with experience were recruited and efficiently tasked
People with experience were recruited. One became the expert in cash management (payments and receipts, borrowing and investing), another in risk management (mostly foreign exchange), a third in interfacing with the subsidiaries over their cash needs and availability, the last with supporting long-term financing needs and internal controls.
We selected a global banking partner
I managed the team and worked on getting a common bank in place, to achieve automatic visibility over global cash balances, reduced banking costs and a controlled environment. Banks with the right capabilities were asked to present, and one was selected as the global provider. The implementation of transferring accounts from other banks to this one was started.
A specialist treasury management system would be bought once the basics were in place
It was accepted that a specialist treasury management system would be purchased when we started getting more sophisticated in our FX risk management, the strategic end-goal, by which point automation would be needed to make the function productive more productive and better controlled. Note, in passing, this was in the days when treasury management systems were significantly more expensive than they are now. These days, one of these systems would be co-equal on the shopping list as a global bank.
The company culture
Showing figures that were different from the accountants’ was taken as an attack on their previously unchallenged dominant position. Several acts of internal sabotage were reported. The CFO, an accountant by training, wanted a monthly explanation of the accounting foreign exchange gains and losses from treasury – something as difficult to achieve without powerful systems as translating Japanese to American English fluently! Treasury staff time began to be taken up not on putting the basics in place but in firefighting instead. The remainder of their time was dedicated to implementing the new bank.
Management impatience
Over time, management forgot that I, as a consultant, had explained to them their long-term objective couldn’t be reached without controlled basics being in place. Unacceptable foreign exchange gains and losses continued to occur, and not enough progress was made. In addition, one the banks being replaced by the new bank was a favourite of at least one of the members of the C-suite. They had been ruled out as the global bank because, at that time, their system could be hacked by editing a text file to find the names of users and their current passwords – an unacceptable situation for a control-oriented treasury. Nevertheless, the C-suite manager didn’t care; it was not his problem.
There was no happy ending
Relationships became increasingly strained. The new structure wasn’t going to happen. It was time to leave.
Improved solvency management
We had achieved control over external cash management, reduced the number of global bank accounts and centralised a lot of cash. Improved solvency management – tick ✔️
Improved profitability management
We had improved FX risk management, reducing head office’s risk and improving the understanding of global risk, in preparation for doing something about it. We had achieved up to $ 2 M in annual savings through better banking costs and reduced borrowing rates. Improved profitability support – tick ✔️
Improved (controlled) productivity
We had improved operational management in the head office and several global locations using strong electronic banking systems, including enhanced internal controls. Improved productivity – tick ✔️
⁉️ Considering this and the 80:20 rule, we could say we set up a control-oriented treasury. However, being honest with ourselves, we hadn’t. Our achievements would likely not pass the test of time.
⛔️ We had not achieved alignment with strategic objectives.
Improved solvency wasn’t a priority
Improving control over cash was not seen as a priority. The company was borrowing mostly to fund acquisitions, not fund subsidiaries. It’s high growth figures meant there were no issues borrowing more. Solvency didn’t need to be controlled better. It wasn’t at risk. ❌
Supporting profitability wasn’t a priority
Profitability wasn’t at risk either. The company was, or was fast becoming, the global leader in its business. The amounts being saved were small compared to the overall profits of the company. In addition, existing and future borrowing capabilities were based on accounting profit before interest expense. Earnings before interest, tax, depreciation and amortisation, to be precise. Interest savings were therefore considered less valuable. Profitability didn’t need to be supported by Treasury. ❌
Productivity improvements were seen as immaterial
Treasury was still a small function. No fraud had happened in the past, so why should one in the future? Treasury’s controlled productivity was trivial to management. ❌
Strategic improvement of FX was wanted; We had delivered only tactical benefits
The failure – mine if you like, or mine plus the CFO’s if you believe in mentoring and collaboration – lay in the lack of alignment with the strategic objectives. In retrospect, implementing immediate and more detailed reporting on FX gains and losses and proposing how to address these would have been a better strategy, irrespective of other potentially more damaging issues. As in other situations, perception was what mattered. Successes that management cared about should have been achieved first before spending significant amounts of time elsewhere. This was the lesson I learned.
I hope you found this real-life case-study interesting and related it back to the previous articles. Do contact me on LinkedIn if anything’s not clear.
Next article: The next article will be on “How does Treasury impact business performance? (Part 2: Strategic Treasuries)”
Treasury Masterminds 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. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information.
This article is written by Monkey
Cash flow management is critical for business success. Whether you’re a startup or an established company, implementing effective cash flow strategies can mean the difference between thriving and barely surviving in today’s competitive market.
This guide explores proven techniques to improve cash flow, recognize warning signs of cash problems, and build a stronger financial foundation for sustainable growth.
Cash flow refers to the net amount of cash moving in and out of your business over a specific period. Understanding the difference between positive and negative cash flow is essential:
Positive Cash Flow: More money coming in than going out – your business can cover expenses and invest in growth.
Negative Cash Flow: Outflows exceed inflows – putting your business at risk of financial difficulties.
Important: Cash flow isn’t the same as profit. While profit reflects earnings after expenses, cash flow measures liquidity – how much actual money you have available to operate your business.
Healthy cash flow management allows your business to:
Recognize these red flags before they become critical issues:
If you’re experiencing any of these symptoms, it’s time to implement cash flow improvement strategies immediately.
Faster collections = better cash flow. Optimize your AR with these tactics:
Invoice Immediately: Send invoices the same day you deliver goods or services. Set Clear Payment Terms: Use specific terms like “net-30” or “2/10 net-30”
Offer Early Payment Discounts: 2% discount for payments within 10 days. Implement AR Factoring: Convert receivables to immediate cash (80-95% of invoice value). Automate Follow-ups: Use software to send payment reminders automatically
While collecting payments quickly, extend your own payment deadlines when possible:
Proactive cash flow management requires regular monitoring and forecasting:
Review operating costs and eliminate waste without compromising quality:
Immediate Actions:
Ongoing Reviews:
Excess inventory ties up valuable cash. Implement these inventory optimization strategies: Just-in-Time (JIT) Ordering: Order stock as needed to minimize excess. ABC Analysis: Focus on managing high-value items more closely
Inventory Turnover Tracking: Monitor how quickly inventory sells. Seasonal Adjustments: Reduce slow-moving inventory before peak seasons
If cash flow issues stem from low profit margins, consider strategic price adjustments:
Create a financial safety net for unexpected expenses or opportunities:
Target: 3-6 months of operating expenses in reserve. Strategy: Allocate 5-10% of monthly revenue to cash reserves. Investment: Keep reserves in high-yield savings or money market accounts. Access: Ensure funds are readily available when needed
Partner with financial institutions to offer early payment options to suppliers while maintaining extended payment terms for your business.
Use excess cash strategically by taking supplier discounts when cash flow is strong and skipping them when cash is tight.
Access multiple financing options including factoring, asset-based lending, and invoice financing to optimize cash flow timing.
Track these key metrics to monitor improvement:
Operating Cash Flow Ratio: Operating cash flow ÷ Current liabilities. Cash Flow Coverage Ratio: Operating cash flow ÷ Total debt payments. Free Cash Flow: Operating cash flow – Capital expenditures Days Cash on Hand: Cash and equivalents ÷ Daily operating expenses
Mistake 1: Focusing Only on Profit
Solution: Monitor both profitability and cash flow separately – they’re different metrics
Mistake 2: Inadequate Forecasting
Solution: Create rolling 13-week cash flow forecasts updated weekly
Mistake 3: Poor Customer Credit Policies
Solution: Implement credit checks and clear payment terms from the start
Mistake 4: Seasonal Planning Failures
Solution: Plan for seasonal fluctuations and build cash reserves during peak periods
Effective cash flow management isn’t just about balancing the books – it’s about creating a solid foundation for business growth and sustainability.
Start today by:
Remember: Small improvements in cash flow timing can have dramatic impacts on your business’s financial health and growth potential.
Ready to transform your cash flow management? The combination of strategic processes, technology solutions, and proactive planning will give you the financial control needed to grow your business confidently.
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
From Treasury Masterminds
Based on a Treasury Masterminds webinar featuring Bojan BelejkovskI, Board Member at Treasury Masterminds, and Charles Brough, VP Global Head of Account Management at SAP Taulia. Moderated by Patrick Kunz.
Recordings on Spotify and YouTube:
Working capital is one of those topics that every company talks about, but few companies truly own.
It sounds simple enough. Improve receivables. Optimise payables. Reduce trapped cash. Create more visibility. Free up liquidity.
In practice, it is rarely that clean.
Working capital does not sit neatly inside one department. Treasury sees the cash impact, procurement negotiates supplier terms, sales agrees customer terms, finance manages the accounting, operations influences execution. Everyone touches it, yet ownership is often unclear.
That was one of the key themes in our Treasury Masterminds webinar, “Unlocking Liquidity: Flexible Working Capital Strategies”, with Bojan Belejkovski, Treasury Masterminds board member, and Charles Smith from SAP Taulia.
As Patrick said during the session:
“There is no working capital department and there will never be a working capital department. Collaboration is the key.”
That may sound obvious, but it is often exactly where working capital initiatives fail.
Treasury is usually close to the numbers. It sees the cash flow forecast, the bank balances, the liquidity gaps, the funding needs and the impact of payment behaviour.
Bojan described treasury’s role very clearly:
“Treasury owns the measurement and the consequence of working capital, even when it doesn’t own the levers themselves.”
That is the uncomfortable truth.
Treasury can see that DSO is moving in the wrong direction. It can see when supplier terms create liquidity pressure. It can see when cash is trapped in entities or countries. It can also see when the forecast does not match reality.
But treasury does not always control the decisions that create the problem.
Sales may agree to extended payment terms to close a deal. Procurement may negotiate supplier terms without considering the full cash impact. Business units may sit on cash locally. By the time treasury is involved, the decision has often already been made.
Bojan put it even sharper:
“Treasury is often the last function to find out and the first one to be asked to fix something.”
Many treasurers will recognise that sentence immediately.
Visibility Comes First
Before companies can improve working capital, they need to understand where liquidity is stuck.
Charles made that point early in the discussion:
“If you don’t have visibility, you can’t actually take any action, and you can’t improve from where you are today.”
This is where many organisations still struggle.
They may have data in ERP systems, TMS platforms, spreadsheets, bank portals and local reports. The information exists, but it is fragmented. By the time it is collected, cleaned and discussed, the opportunity may already have moved.
That lack of visibility makes it difficult to answer basic questions.
Without answers to those questions, working capital management becomes guesswork. And guesswork is not a strategy, even if someone puts it in PowerPoint.
One of the most interesting parts of the webinar was the discussion about receivables.
When asked where he would focus first, Bojan did not hesitate.
“If I can fix one tomorrow, it’s going to be receivables.”
His reason was simple. Receivables are often under-owned.
Sales is focused on revenue. Credit is focused on risk. Finance is focused on accounting. Treasury is focused on cash. All of them have a role, but that does not automatically create ownership.
Or as Bojan said:
“Everyone touches receivables. No one owns it.”
That is a big issue.
A company can have a strong sales performance and still struggle with cash collection. It can have good revenue growth while liquidity gets stuck in overdue invoices. It can have a strong pipeline, while treasury is forced to deal with the cash gap.
Receivables are also messy. Customer behaviour changes. Billing data is not always clean. Collection processes are not always consistent. Commercial teams do not always want to have uncomfortable conversations with customers.
That is why receivables deserve more attention from treasury.
Not because treasury should suddenly become the collections department, nobody needs that tragedy, but because treasury can help quantify the cash impact, highlight the risk and bring the right teams together.
Supply chain finance was another important topic in the discussion.
It is sometimes presented as a simple liquidity tool. Extend payment terms, offer suppliers early payment, unlock cash. Done.
Reality is more nuanced.
Charles explained it well:
“The primary value of supply chain finance is as a negotiation tool.”
That is an important distinction.
A good supply chain finance programme is not just about creating liquidity for the buyer. It can also support suppliers by giving them access to financing at better rates than they could achieve on their own.
For the buyer, it creates flexibility. For the supplier, it can reduce cash flow pressure. For procurement, it becomes part of the broader supplier relationship.
That also means success depends on adoption.
Charles made another practical point:
“It’s not just about the rate. The supplier experience matters just as much.”
If the programme is difficult to use, suppliers will not adopt it. If procurement is not involved, it will not scale. If treasury builds the programme in isolation, it risks becoming a nice technical solution that nobody actually uses.
Bojan was clear on this as well:
“The programs that scale are the ones where procurement and treasury are genuinely aligned on day one.”
That is probably one of the most practical lessons for any company considering supply chain finance.
Do not start with the technology.
Start with alignment.
Working capital cannot be managed properly if treasury only joins at the end of the process.
Bojan captured this perfectly:
“You can’t drive strategy from the end of the process.”
If customer terms are agreed without treasury input, the cash impact becomes treasury’s problem later. If supplier terms are negotiated without considering liquidity, treasury has to manage the consequences. If local entities hold excess cash without group visibility, treasury has to work around the structure.
The companies that do this better involve treasury earlier.
Bojan explained:
“The companies where treasury drives working capital have given treasury a seat early and with a mandate.”
That mandate matters.
Treasury should not be there just to report the outcome. It should help the business understand the cash effect of decisions before those decisions are made. This does not mean treasury needs to own sales, procurement or operations. It does mean treasury should be part of the conversation when payment terms, financing structures and liquidity trade-offs are discussed.
Naturally, AI came up during the webinar. It always does now. Mention treasury technology in 2026 and AI enters the room like it owns the building.
But the discussion was refreshingly practical.
AI is not the first step.
As Patrick said during the session:
“AI is not step one. It’s often step three or four.”
Before AI can add real value, companies need visibility, automation and clean data. If the underlying data is poor, the output will be poor as well. AI does not magically fix broken processes. It just makes bad data look more confident.
Charles described the role of technology around three themes: visibility, scalability and automation.
Automation removes manual work. It makes receivables finance more scalable. It supports reconciliation. It helps treasury teams manage more with fewer resources.
Only after that foundation is in place does AI become truly useful.
Charles summarised the right mindset clearly:
“People direct. AI executes.”
That is the point.
AI should help treasury professionals gather information faster, analyse patterns and support better decisions. It should not replace judgment.
For small treasury teams, this can be powerful. Less time spent collecting data. More time spent using it.
Towards the end of the webinar, we discussed a more provocative question.
Are working capital programmes real liquidity improvements, or are they sometimes just balance sheet cosmetics?
The honest answer is: both can happen.
Some programmes are used around reporting dates to improve metrics temporarily. That may look good on paper, but it does not necessarily improve the underlying business.
Bojan was clear about that risk:
“Cosmetics are real, but they shouldn’t be the reason why you did the program.”
A well-run working capital programme should create repeatable value. It should improve liquidity, reduce funding pressure, strengthen supplier or customer relationships and give the company more flexibility.
Charles brought the discussion back to one key metric: the internal cost of cash.
If a company understands its true cost of cash, it can make better decisions about early payment discounts, supplier financing, receivables finance and liquidity trade-offs.
That is when working capital moves from cosmetic reporting to real value creation.
Working capital is not just a treasury topic: It is a business topic.
Treasury may see the problem first, but it cannot solve it alone. The real value comes when treasury, procurement, sales, finance and operations work from the same playbook.
That requires visibility.
It requires shared ownership.
It requires technology that supports the process.
And most importantly, it requires treasury to be involved before the problem lands in the cash forecast.
Working capital is often described as hidden liquidity. That is true. But in many companies, the liquidity is not just hidden in receivables, payables or trapped cash.
It is hidden between departments.
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. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information.
This article is written by TreasuryCube
From back-office function to strategic powerhouse: How modern treasury departments are reshaping corporate finance
Corporate treasury has undergone a remarkable metamorphosis. Once relegated to the shadows of financial management—handling cash, monitoring liquidity, and mitigating basic risks—treasury has emerged as a critical strategic partner driving organizational success. This evolution isn’t merely an upgrade; it’s a complete reimagining of what treasury can and should deliver.
Today’s treasurers sit at the nexus of strategic decision-making, armed with real-time insights, predictive capabilities, and technological prowess that was unimaginable just a decade ago. As CFOs face mounting pressure to deliver value beyond traditional finance functions, treasurers have stepped up to become indispensable strategic advisors.
Organizations hesitating to modernize their treasury functions face existential risks in today’s volatile business landscape:
As one Fortune 500 treasurer recently noted: “Our transformation journey wasn’t optional. It was either evolve or become obsolete.”
The marriage of digital technologies with treasury operations has created unprecedented efficiencies. AI and ML algorithms now predict cash positions with remarkable accuracy, while RPA has eliminated manual processes that once consumed thousands of labor hours annually.
Consider the impact: One global manufacturer reduced payment processing time by 87% through intelligent automation, freeing their treasury team to focus on strategic initiatives that generated over $12M in additional working capital.
Treasury transformation has been significantly advanced by innovative TMS providers like TreasuryCube. As a comprehensive corporate treasury management software, TreasuryCube helps companies manage their cash, liquidity, risk, and investments with exceptional efficiency. Built on the latest .NET framework and utilizing web assembly technology, this SaaS platform offers:
The explosion of financial data has transformed treasurers from backward-looking reporters to forward-thinking strategists. Advanced predictive models now forecast cash positions with precision while identifying anomalies that might signal fraud or operational issues.
Real-time dashboards have replaced monthly reports, enabling treasurers to:
TreasuryCube exemplifies this trend with its comprehensive reporting and analytics capabilities, including customizable dashboards and automated report generation that enable companies to monitor financial performance, identify trends, and make data-driven decisions.
As regulatory frameworks grow increasingly complex—from Basel III to IFRS 9 to expanding ESG mandates—treasurers have evolved sophisticated compliance capabilities. Treasury transformation has enabled organizations to navigate this complexity with remarkable precision.
Modern treasury management systems like TreasuryCube ensure adherence to internal and external regulatory requirements, such as anti-money laundering (AML) and know-your-customer (KYC) guidelines, while incorporating robust security measures to protect sensitive financial data.
ESG considerations have moved from peripheral concerns to central treasury priorities. Forward-thinking treasurers are now:
The migration to cloud-based treasury management systems represents more than a technology shift—it’s a fundamental reimagining of how treasury functions operate. TreasuryCube embodies this evolution as a genuine multi-tenant Software-as-a-Service platform that offers:
As a cloud-native solution, TreasuryCube eliminates the need for extensive implementation timelines with highly configurable workflows and prebuilt master data upload capabilities, reducing consulting and implementation hours significantly.
The API revolution has unleashed unprecedented connectivity between treasury systems, banking partners, and third-party platforms. TreasuryCube leverages this technology with custom connections to both internal and external data sources, ensuring that no matter which solutions or services a company utilizes, their data is always available for visualization, analysis, and reporting.
This connectivity enables:
As treasury operations digitalize, cybersecurity has evolved from IT concern to treasury imperative. Leading treasury management systems like TreasuryCube utilize enterprise-grade security measures, including:
Innovative treasurers have transformed working capital management from a financial necessity to a competitive advantage. TreasuryCube enhances this capability by optimizing receivables, payables, and inventory management through:
The relationship between corporate treasury and FinTech has evolved from competitive to collaborative. TreasuryCube exemplifies this trend by delivering specialized financial software development services that create secure and reliable IT ecosystems for treasury departments.
This approach enables treasurers to:
Perhaps most significantly, the profile of treasury professionals has fundamentally changed. Today’s high-performing treasury teams blend:
TreasuryCube supports this evolution by providing intuitive, user-friendly interfaces that are built on modern technology frameworks, enabling treasury professionals to focus on strategic activities rather than manual processes.
The trajectory is clear: tomorrow’s treasury function will serve as the strategic command center for organizational financial performance. With solutions like TreasuryCube leading the way, we can expect:
As TreasuryCube’s approach demonstrates, this evolution is not just about technological advancement—it’s about empowering financial decisions with real-time insights and seamless automation that drives business value.
Corporate treasury transformation represents more than modernization—it signifies the transcendence of traditional financial boundaries. The treasury function is evolving from a processing center to a value creator, from a risk mitigator to an opportunity enabler, from a cost center to a strategic advantage.
Advanced treasury management systems like TreasuryCube are at the forefront of this evolution, providing the technological foundation that enables treasurers to deliver strategic impact. With features ranging from cash flow positioning and forecasting to intercompany netting and seamless accounting integration, these systems are redefining how treasury departments operate.
Organizations that embrace this transformation journey position themselves not just for financial efficiency but for market leadership. In a business environment characterized by volatility and disruption, a transformed treasury function—supported by innovative technology solutions—becomes the financial north star, guiding the organization through uncertainty with clarity, confidence, and strategic purpose.
The question is no longer whether treasury transformation is necessary, but whether your organization will lead or follow in the race to reimagine what treasury can achieve.
Treasury Masterminds is a community of professionals working in treasury management and those interested in learning more about topics such as cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information.
