5 min

10 Sessions not to miss at AFP Nashville 2024

Author
Panax Team
Published
Oct 10
2024

AFP 2024 is one of the biggest finance and treasury conferences of the year. This year it takes place in Nashville, making it even more exciting for participants looking to learn, but also enjoy everything the city has to offer. Here’s our take on what not to miss at AFP Nashville 2024

1. From Automation to Intelligence: A DIY Adventure in RPA, Sunday 1-2pm, Financial Planning & Analysis

Speakers: 

  • Michelle Crowell, Director of Finance, Nextep, Inc.
  • Nikita Miller, FPAC, Director of Facilities and Financial Planning & Analysis, The Kresge Foundation

Session description: Systematic data collection, transformation and analysis are at the root of the success of Treasury and FP&A. While many technologies provide automation and standard reporting, most professionals are presented with gaps in technology that must be addressed.

This session spotlights how one pioneering team successfully eradicated the need for extensive staffing by leveraging cutting-edge robotic process automation (RPA) and data transformation technologies, leading to a profound improvement in accuracy, timeliness, and the seamless distribution of business-critical information. Break free from the shackles of repetitive daily tasks, fostering a future where efficiency, precision, and scalability go hand in hand.

2. Modernizing Customer Collections and Payments, Sunday 2:30-3:30pm, Payments

Speakers: 

  • Katie Chew, Managing Director, Treasury Operations, United Airlines
  • Frank Pertusiello, Director, Solution Sales, Citi
  • Kammy Tsang, Senior Director, Treasury, Ripple

Session description: Traditional collection and payment methods have long been plagued by high costs, inefficiencies, manual processes, and delayed settlement. As consumers become more tech-savvy, companies must adapt. In the airline industry, digital payments have transformed ticket purchases and refunds, with passengers seeking a streamlined, real-time, and flexible digital experience.

These innovations in the airline industry also apply to other consumer-facing sectors, driving similar benefits that reduces costs, streamlines operations, improves working capital, and maximizes growth. Join this session to explore these transformative innovations and their broader applications.

3. Revenge of the Tipping Point Sunday 4:30-6:00pm, Keynote

Speaker:

  • Malcolm Gladwell 

Session description: In his latest book, New York Times bestselling author Malcolm Gladwell, revisits the phenomenon of social epidemics and examines the ways in which we have learned to tinker with and shape the spread of ideas and trends—sometimes with great success, sometimes with disastrous consequences. Today’s epidemics are turbocharged versions of their earlier counterparts, and we are more tempted than ever to try to manipulate tipping points for our own ends.

Treasury and finance professionals need to apply the concept of the tipping point – how small changes can make a big impact - to influence their organization’s success or even the world for the better. In this thought-provoking keynote, Gladwell shares the insights needed 

4. Finding Your TMS Soulmate: Swipe Right on Success, Monday 8:30am-9:30am, Treasury Management

Session description: In relationships, you don’t need to find someone who is perfect — you need to find someone who is perfect for you. The same can be said when selecting a TMS. While there is no one perfect TMS, there is one (or more) that is right for you. But how do you know which one to swipe right on?

In this session, two experts in the industry teach attendees how to successfully choose a TMS, covering selection, implementation, and usage, and including an exploration of the practical and realistic applications of the latest technologies (e.g., AI, ML, API), emerging products in the TMS space, and what you should do now.

Speakers:

  • Staci Holt, CTP, Sr. Manager, Treasury Operations, Pilot Company
  • Tracey Knight, Principal Consultant, SaaS-Y Business Consulting
  • Danecia Stewart, Director, Treasury, NextDecade

5. Demystifying Cash Flow Forecasting, Monday 10:30-11:30am, Capital Markets & Investments

Session description: Having a robust cash flow forecast is critical for the financial health of a business both from a day to day operational and long-term strategic perspective. It provides valuable insights that enables companies to make more informed decisions, have better liquidity & working capital management, and instill investor confidence.

Discover how Salesforce’s Treasury team harnesses real-time data to gain visibility into cash and forecast future cash flows. By leveraging industry-leading technologies, they streamline and automate tedious tasks of data extraction and manipulation, and free up time for value-added analysis.

Speakers:

  • Brian Krafcheck, Sr Director, Treasury, Salesforce
  • Priscilla Yip, Sr. Manager, Treasury, Salesforce
  • Timothy Lee, Treasury Manager, Salesforce

6. From Strategy to Execution: Best Practices for Corporate Investments, Monday 1:45-2:45pm, Capital Markets & Investments

Session description: Treasury and financial professionals play a crucial role in managing a company’s financial resources. Understanding how to best deploy excess cash, write an impactful investment policy, and invest strategically are all essential components of their responsibilities. Given the current market volatility and the uncertainty of future economic conditions, treasury professionals must be able to identify and act on opportunities as they arise.

This session explores the essential controls for managing a robust investment program, from investment selection and daily operational management, compliance controls and key performance metrics. Attendees gain valuable insights to elevate their organization’s cash management and investment strategy to the next level.

Speakers:

  • Bridget Rodnick, Assistant Treasurer, BioMarin Pharmaceuticals, Inc.
  • Jessica Siu, Senior Manager, Treasury, Dropbox, Inc.
  • Sara Flour, CTP, Managing Director, RBC Global Asset Management

7. Request for Payments (RFP) a Year Later, Tuesday 8:30-9:30am, Payments

Session description: The U.S. receivables and payments landscape are undergoing a significant transformation, largely driven by the advent and adoption of Request for Payment (RfP) solutions facilitated by instant payment networks such as the RTP® Network and FedNow. These solutions promise to redefine bill payment and Point of Sale (POS) experiences for businesses and consumers alike.

This session not only reflects on the year’s advancements but also charts the course for future developments in RfP solutions and provides attendees with actionable insights for optimized financial operations and customer engagement.

Speakers:

  • Joshua Karoly, Director, Payments, Netflix
  • Cheryl Gurz, Vice President, RTP Product Management, The Clearing House
  • Dean Nolan, Managing Director, Commercial Payments, Strategic Resource Management (SRM), Inc.
  • Mike Thomas, SVP Head of Instant Payments, US Bank

8. Masterclass in Change Management for Finance Leaders Adopting Automation & AI, Tuesday 10:30-11:30am, Financial Planning & Analysis

Session description: Technology is changing the world faster than ever. While much has been said about the technical aspects, we must also consider the human element. Maximizing the impact of automation and AI on your finance organization requires changing how people approach their work, not just upgrading the systems that support them.

This interactive discussion explores practical strategies for building awareness and positive engagement across the organization and overcoming barriers to change while creating a culture of feedback and accountability. Attendees learn how to measure and communicate the value of automation and AI to their leadership team to successfully build buy-in for further investment in the finance function.

Speakers: 

  • Derek Milioni, VP of Finance Transformation, Bakerfield Solutions
  • Cassie Wang, SVP, Head of Finance, Lightship Security, Inc.
  • Mariya Guttoh, FPAC, Director of FP&A & Treasury, PayJoy

9. Implementing a Treasury Policy in a Newly-Created Treasury Department, Tuesday 2:00-3:00pm, Treasury Management

Session description: In a time of market unpredictability, companies and stakeholders are prioritizing Risk Management. More important than its size, a robust treasury policy is essential for identifying, assessing, and mitigating risks, managing cash flow, and navigating business volatility, including changes in interest rates.

Teranet addressed these challenges by establishing a dedicated treasury department and creating a new, tailored treasury policy that governs its operations. This session stresses the importance of an effective treasury policy that strikes a balance—being concise, yet comprehensive - that encompasses all treasury functions, promotes accountability and is regularly reviewed at the highest levels.

Speaker: 

  • John Garofano, CTP(CD), Senior Director, Treasurer, Teranet

10. Virtual/Hybrid Teams: Virtual Meeting Mastery, Wednesday 10:00-11:00am, Principles in Practice

Session description: In this workshop, attendees learn how to master virtual meetings using a specific framework that is rooted in proven best practices. It begins with learning how to start with the end in mind by having a follow up system in place before you go into a meeting. Next, attendees discover how to organize and plan their meetings using a framework to ensure everything runs smoothly.

Discussion includes tactics for effectively running meetings by staying on track and managing participation using tools and tips to guide question asking and listening.

Speaker:

  • John Sanchez, Managing Director, The FPA Group

In between sessions, come and learn about Panax at Booth 239 or book a meeting directly. Panax was founded by former finance professionals, to solve the pain suffered by lean finance teams with complex treasury needs. Panax simplifies your cash complexity in one secure, flexible and easy to run platform, so you can minimize cash risk and optimize liquidity. Come along to take part in our raffle to win some awesome Lego prizes (you can pre-register here) and collect a cute baby Panax panda. 

And two bonus sessions we also recommend:

Simplifying the World of Cross-border Payments

We are living in the world of everywhere commerce. Social commerce picked up, and companies of all shapes and sizes are starting to support online payments. How can companies looking to venture into this space set up an e-commerce solution that integrates into treasury processes with minimal investment and effort? And how can the more established payment companies make cross-border payments easier and more streamlined to deliver the best user experience for customers?

In this session, hear from treasury and payments professionals across different industries who have successfully integrated international payments into their core product offering, consequently building a new revenue stream for their company.

Speakers

Saif Ashraf, Lead, New Business Treasury Implementations, Google Inc.

Christopher Mager, Senior Director, B2B Connect, Visa

Anand Natarajan, TMT and Fintech Head, Cash Management, Standard Chartered Bank

FX Netting: Untangling Global Intercompany Currency Flows

Approaching a treasurer to discuss their top FX priorities inevitably brings up the elephant in the room: simplifying the intercompany settlement process. This aspect is widely recognized as a significant opportunity for enhancing process efficiency and achieving cost savings, yet it often lingers low on the priority list. But is it as daunting as it seems? Join this session for firsthand details of a successful IC netting program roadmap, and a journey in optimizing an established program amidst decentralized ERP systems. Attendees leave armed with practical tips, innovative tools, and fresh ideas, regardless of where their organization stands on its journey to navigating the global intercompany FX flows.

Speakers

Brandon Larsen, VP of Sales and Trading (Central), GPS Capital Markets

Heber Wygant, Director of Tax & Treasury, Sundyne LLC

Bryan Ritts, Global Cash Manager, Wilsonart LLC

Interested to learn how Panax can help with your cash management needs? Book a meeting directly.

Sign up in advance for our raffle

Subscribe to our blog
panaxpanax

Transform Cash Management, Unlock Growth

Streamline cash forecasting, mitigate cash risks, and gain actionable insights to drive smarter financial decisions.
Get a Demo
panaxpanax
About Panax
Panax forecasting: automate and customize your financial forecasting

Finance teams are required to forecast cash for multiple reasons:

  • Staying ahead of upcoming inflows and outflows and preventing a potential short fall of cash 
  • Identifying opportunities of excess cash that can be invested and gain interest 
  • Contingencies/requirements from investors or banks

But despite the fact that forecasting is a critical tool in financial planning, many organizations struggle to get it right.

Common challenges include data inaccuracies, time-consuming manual processes, and the reliance on outdated methods. These issues can lead to unreliable forecasts, making it difficult for businesses to plan for the future, manage cash flow, and mitigate risks effectively.

Panax's forecast feature is designed to address these challenges head-on, providing businesses with a powerful tool to navigate their financial future with confidence.

Cash forecasting with the Panax platform

Panax’s forecast capability allows our customer to build a monthly forecast. The goal is to allow our customers to foresee their expected inflows and outflows and the expected balance, so they can maintain control and make data-driven decisions. The forecast can either be built at a company level or per entity and then aggregated to a company level.

Why forecast with Panax? 

  • Accuracy - Panax connects to all your banking data, providing an easy and automated way to base your forecast on historical data and future ERP data. This allows you to easily and more accurately plan future inflows and outflows.
  • Automation - We generate the forecast automatically each month by rolling your forecast based on your input assumptions and updated actuals. 
  • Bottom up and customized - We allow you to create forecast methods based on your knowledge of the cash flow. Each category can be configured per your understanding and adjusted to your needs.

How Panax forecasting works

Initial setup

First, define a forecast method. This will determine how the forecast is populated. You can choose between a few different methods:

1. ERP-based - If you have an ERP connected to Panax, you can pull your expected invoices from the ERP and place the total amount as a forecast for the time period they apply to. You can then layer on additional forecast methods for the following months, from additional sources of data. 

2. Recurring amount - Input an amount that repeats monthly. You can also add a formula to increase/decrease the amount month-over-month.

For example, if your office and rent expenses are $120,000 you can input that amount. It will be populated throughout each month of the forecast for that category. 

3. Based on historical data - By bringing in all your actuals, you can rely on the historical behavior of a certain category to build a forecast. This will be based on the average over a certain period, the growth rate over a certain period, or on your annual growth rate.

For example, if your sales are seasonal, you can build the forecast for your collectionsit to be based on the same month last year’s month sales + add a growth rate.

4. Based on data from another category - You can also rely on amounts from other categories, which means your forecast can be calculated as a % of that category. 

For example, if your shipping expenses are 3% of last month’s collection, you can add that method point to last month’s collection. Panax will populate the forecast for shipping, based on the forecast for collection.

5. Manual input - You can also manually define an expected amount per month and use that as you forecast. 

For example, if your marketing spend is based on a plan you receive from the marketing team, you can just input the spend manually per month.

Actuals vs. forecast 

When the month ends, we will automatically roll the forecast and create a new version that is based on the updated actuals. You will see an end-of-month summary that compares this current  month actuals vs. forecast: 

Based on this summary you can adjust and optimize your forecast for the following month. 

Reporting and analytics

Use the variance report to review what was forecasted for a specific month in a previous months version of the forecast vs. what you are forecasting now. For example, if in May your forecast showed the Closing balance in July to be at a certain amount and then in June the forecast was updated and now the closing balance for July shows a lower amount, you can drill down into the inflows and outflows to better understand what in the actuals / forecast was changed that caused that difference. 

By leveraging the variance report, you can:

  1. Identify Discrepancies: Quickly pinpoint where and why discrepancies between forecasts occur, whether due to changes in revenue, expenses, or other financial factors.
  2. Improve Accuracy: Use insights from the variance analysis to adjust your future forecasts, making them more accurate and reflective of real-world changes.
  3. Enhance Decision-making: Gain a deeper understanding of your cash performance, allowing for more informed strategic decisions and proactive liquidity management.
  4. Increase Accountability: Track and explain variances to stakeholders, ensuring transparency and accountability in your forecasting process.


Learn more about Panax forecasting and how automation can help you do your job better.

5 min
About Panax
Panax secures $10M series A funding round

As businesses navigate an increasingly uncertain economic landscape, managing cash flow, liquidity, and financial risks has never been more critical. Today, we’re excited to announce that Panax has secured $10 million in Series A funding, led by Team8 and TLV Partners, to further our mission of transforming treasury management for mid-market and large enterprises.

The Challenge Finance Teams Face

For finance teams operating in complex environments—managing multiple bank accounts, currencies, and entities—gaining real-time visibility and control over cash flows is a constant challenge. Traditional treasury management systems often fall short, requiring hours of manual data gathering and leaving teams vulnerable to errors and inefficiencies.

Our Solution: AI-Powered Cash Flow Management

Panax addresses these challenges head-on with our AI-driven platform that consolidates financial data from banks, ERPs, and other sources into a single, unified view. Our solution automates transaction categorization, surfaces critical insights, and provides real-time cash forecasts, empowering finance teams to optimize liquidity and make data-driven decisions with confidence.

Our customers have seen remarkable results. Many report saving over $100K annually on interest payments, while others have increased their cash invested in interest-bearing accounts by 15-20%. Perhaps most importantly, Panax has freed up 15-30 hours per week that were previously spent on manual data tasks, allowing finance teams to focus on more strategic initiatives.

The Road Ahead: Scaling with New Funding

With this new round of funding, Panax is poised for rapid growth. We plan to expand our U.S. presence with a new office in New York City, scale our sales and support teams to meet rising market demand, and accelerate product development to bring even more powerful features to our platform.

Our leadership team—CEO Noam Mills, CTO Sefi Itzkovich, and CBO Niv Yaar—brings deep expertise in both finance and technology, having experienced these pain points firsthand. It was this firsthand knowledge that inspired the creation of Panax, and it’s what drives our commitment to delivering value to our customers.

Investor Confidence and Vision

Our investors share our vision for the future of treasury management. Hadar Siterman Norris, a partner at Team8, emphasized, "The evolving role of the CFO requires strategic foresight and innovative tools. Panax is uniquely positioned to lead in this space, delivering tangible value to finance teams across industries."

Yonatan Mandelbaum, a partner at TLV Partners, added, "Panax is set to become the operating system for finance teams, orchestrating all aspects of financial operations. The combination of finance and tech expertise within the Panax team is what sets them apart."

Join Us on This Journey

As we embark on this next phase of growth, we’re excited to continue working with our customers to redefine what’s possible in cash flow management. If you’re ready to see how Panax can transform your treasury operations, book a demo today or visit our website to learn more.

5 min
AI
Data connectivity for finance: everything you need to know

Cash flow management is the lifeblood of your treasury operations. It allows you to properly and accurately track the money that is coming in and out of your business and to forecast cash flow needs. A comprehensive and reliable data set is the basis for a reliable and effective management of cash flow.

In this blog post, we co​​mpare three popular technologies used to gather cash data including: file-based systems, APIs and modern data connectivity systems. We dive in to see which ones help CFOs and treasury teams obtain accurate and relevant data to enable financial health and relevant forecasting.

Cash Flow Management Requirements

Before diving into the three technologies, let’s look at the requirements treasury teams have from cash management technologies and solutions:

A modern cash flow management solution should ensure:

  • Data freshness - Providing and displaying fresh and up-to-date financial information, at all times. This allows you to always have a clear and up-to-date picture of the company's financial situation and health. Fresh and up-to-date data is essential for managing liquidity, optimizing working capital, avoiding potential cash shortages or surpluses, addressing discrepancies and enhancing overall financial accuracy.
  • Data richness - Ensuring financial data is complete in depth and breadth, including transaction descriptions, vendor descriptions, information on transaction senders and receivers, historical data and multicurrency data support. Rich data provides a comprehensive view of all financial transactions, trends, and patterns, enabling more accurate forecasting, granular financial analysis, and improved budgeting and strategic planning.
  • Format standardization - Creating standardization among financial data and establishing standardized formats for financial data entry, reporting and documentation. This ensures consistency, accuracy and efficiency across financial processes, leading to improved overall quality and reliability of financial information.
  • Security - Implementing access control to determine who can interact with financial systems and what data they can access. This protects sensitive financial data from breaches and cyber threats, maintaining the trust of stakeholders and ensuring compliance with security standards and regulations.
  • Future-proofing - Adopting scalable and flexible financial management tools that integrate with other business systems, are capable of handling increasing transaction volumes and complexities as the business grows, and use AI to enhance analytics and insights.
  • Streamlined processes - Simplifying and automating tasks such as information gathering, cash categorization, cash positioning, reporting, trends analysis and forecasting. This allows finance teams to focus on strategic activities rather than administrative duties, leading to better decision-making and more reliable forecasting. Additionally, reducing friction in cash flow management enhances the user experience, resulting in happier, more productive treasury teams.

The Problem with File-based Systems

Cash flow management has relied mostly on file-based systems for performing financial transactions and reporting activities. This often involves direct connections to banks using SFTP servers, with files being transferred daily or at intervals of several days. Legacy companies sometimes even resort to proprietary system access. Even the widely-used SWIFT network still operates on messages, which are basically file-based.

These systems are better than their predecessor - manual actions. They help make the process more efficient and provide better visibility and control.

However, these systems also create their own set of challenges for treasury teams.

  • Setting up and maintaining file-based transactions is a complicated and manual process. It  requires specialized knowledge, cutting through red tape, overcoming cumbersome processes with multiple steps and stakeholders and constant upkeep.
  • File-based connections lack modern security measures.
  • Not all file formats are created equal. From MT940 to BAI2 to other formats, ingesting, aggregating and normalizing these data formats is a complicated and error-prone process.
  • Files are delivered in bulk, meaning data is updated periodically rather than in real-time. This compromises the ability to make real-time decisions and have an accurate financial picture at any given time.
  • Multiple file formats delivered at different times can compromise data quality.
  • Data granularity is limited to the information sent in the file, rather than being enriched by a system.
  • File-based systems lack the ability to scale, integrate with modern systems and evolve with technological advancements.
Seamless data connectivity is the backbone of modern financial decision-making, enabling accurate, real-time insights that drive business success

Are APIs Enough?

Many financial teams use APIs provided by banks, payment processors, financial service providers, financial aggregators and other financial entities. These APIs are used to connect their own internal systems with these external services. APIs act as the intermediaries, enabling secure and standardized communication between different systems. With APIs, treasury teams can enhance operational efficiency and enable better financial management.

However, despite the advancements APIs enable, connecting via APIs still involves friction for treasury teams:

  • Setting up API connectivity is cumbersome, manual and sometimes complex
  • The provided data is not always standardized and therefore lacks a real-time view of the financial status
  • The data arriving from the financial institution, may be lacking and missing, sometimes due to the way APIs were configured
  • Not every bank or institution offers an API, and not all APIs are the same. While some are robust, fast, and easy to implement, accompanied by clear documentation, others lack any or all of these features. 

Modern Data Connectivity Systems

The next generation of connectivity comes with the new model data connectivity systems. These data connectivity systems leverage the advantages of each type of technology while adding on more layers of data, normalization and analysis.

Modern data connectivity systems include:

  • File-based connections and APIs
  • Additional host-to-host connections
  • An additional layer of synthesis and analysis, presenting all financial information in a standardized and easy to consume format
  • A real-time and rich picture of the financial status and health
  • Modern integrations and technologies
  • AI for better data quality

These capabilities reduce overhead, enhance data quality and support scale. They are also flexible enough to adapt to any future needs.

File-based vs. APIs vs Modern Data Connectivity: A Comparison Table

Conclusion

Optimal and accurate cash flow management is essential for building and maintaining healthy treasury operations. Choosing the right technology ensures you always have an up-to-date view of your cash flow position, complete with insights for forecasting, without worrying about the overhead of adding data or security.


Learn more about Panax’s modern data connectivity technology here

5 min
Working Capital
What is working capital management?

Working capital is the difference between a company’s current assets (e.g., cash, inventory, accounts receivable) and current liabilities (e.g., accounts payable, short-term loans).

The formula is simple:

Working Capital = Current Assets – Current Liabilities

Working capital management is the process of managing these resources to meet short-term obligations and remain operational.

Simple Example:

Imagine a small retail business. Their inventory (current asset) is worth $50,000, while their accounts payable (current liability) sits at $30,000. Their working capital is $20,000. If they poorly manage accounts payable or overstock their inventory, they risk liquidity issues that could jeopardize daily operations.

Why businesses need to manage working capital effectively

Proper working capital management ensures financial stability. It’s a balancing act—too much working capital may suggest inefficiency, while too little can lead to liquidity crises. Effective management provides the flexibility to meet immediate financial obligations and invest in growth opportunities.

The link to cash flow optimization

Working capital management is inextricably tied to cash flow. By optimizing accounts receivable, accounts payable, and inventory, businesses can accelerate their cash conversion cycle (CCC)—the time it takes to convert investments in inventory into cash received from customers. Essentially, a shorter CCC means smoother cash flow.

Impact on profitability and liquidity

  • Profitability improves as funds tied up in working capital can be reinvested into high-ROI opportunities.
  • Liquidity reduces the risk of insolvency, ensuring the company can cover its short-term liabilities.

How it works

  1. Monitor assets and liabilities: track cash, accounts receivable, inventory, and accounts payable. 
  2. Analyze ratios: use ratio analysis to measure working capital management effectiveness.
  3.  Make decisions: use the information to make decisions about short-term spending and debt. 
  4. Improve processes: use software to automate processes like invoicing and payments. 

Types of working capital

To create financial strategies tailored to your business, it’s critical to understand the different forms of working capital:

  1. Permanent working capital 

Permanent working capital is funds that are consistently required to support basic operational needs (e.g., maintaining inventory). These funds remain constant irrespective of fluctuations in business activity levels and are vital for sustaining long-term operations. Properly managing permanent working capital ensures the business operates smoothly even during periods of economic uncertainty.

  1. Regular working capital 

These are funds needed to cover routine operational expenses in running a business. Regular working capital is critical to maintaining liquidity and meeting short-term obligations without disruption.

  1. Reserve working capital 

Reserve working capital is funds set aside to address unexpected expenses or financial contingencies due to unforeseen circumstances. Maintaining adequate reserve working capital safeguards the business against potential disruptions and assures operational stability under challenging conditions.

  1. Fluctuating working capital 

Fluctuating working capital requires careful planning and monitoring to effectively allocate resources during peak and off-peak periods. Proactively managing these variations helps prevent cash flow issues and supports business operations.

  1. Gross working capital 

Gross working capital refers to the total current assets available within a business, including cash, accounts receivable, inventory, and other liquid assets. By effectively managing gross working capital, the organization has sufficient resources to meet short-term obligations while enabling smooth operational processes.

  1. Net working capital 

Net working capital is the difference between a company's current assets and current liabilities, which indicates financial health. Maintaining positive net working capital is essential for meeting short-term liabilities and supporting day-to-day operations.

5 Key components of working capital

To streamline working capital management, businesses usually focus on the following  critical elements:

  1. Current assets

Current assets encompass resources a company can convert into cash within a short period, typically a year. These assets include i) cash and cash equivalents ii) accounts receivable, inventory, and iii) short-term investments. Managing current assets is crucial for maintaining liquidity while covering immediate financial needs. These resources allow businesses to manage operations seamlessly, respond to market demands, and support growth opportunities. Proper oversight and optimization of current assets directly contribute to a strong financial position. 

  1. Current liabilities

Current liabilities include i) accounts payable and ii) short-term loans, which represent the company's immediate financial responsibilities. Accounts payable refers to amounts owed to suppliers or vendors for goods and services already received, while short-term loans typically involve borrowed funds that must be repaid within a year. Correctly managing these liabilities is essential to maintaining the organization's financial health and smooth daily operations.

  1. Net working capital formula

Net Working Capital = Current Assets - Current Liabilities

Net working capital is a critical measure of a company's short-term financial health, operational efficiency, and liquidity. A positive net working capital means that the company has enough current assets to cover its current liabilities, meet financial obligations, and invest in growth opportunities. On the other hand, a negative figure could mean potential liquidity issues and necessitate immediate attention to protect the business’s stability.

What should be excluded from working capital?

Items that aren’t part of a company’s short-term assets or liabilities are not part of working capital and include: fixed assets (e.g. real estate and equipment that can’t be converted into cash within a year, long-term debt and lease obligations that go beyond a year, retained earnings or common stock, and patents and trademarks).


Benefits of effective working capital management

Why should organizations prioritize working capital management? Read on for the key benefits: 

Improved cash flow & liquidity 

Effective working capital management ensures a steady and reliable cash flow, allowing organizations to maintain liquidity for operational needs and unforeseen expenses. By optimizing receivables, payables, and inventory levels, companies can reduce financial strain and avoid costly short-term borrowing. This proactive approach not only supports day-to-day operations but also provides flexibility to take advantage of strategic investment opportunities that power long-term growth and stability.

Better risk management 

Effective risk management is critical for mitigating financial uncertainties and safeguarding organizational stability. By analyzing potential threats and implementing robust contingency plans, companies can minimize the impact of adverse events on their operations. Proactive identification and evaluation of risks allow businesses to allocate resources strategically, reducing exposure to volatility.

This structured approach enhances decision-making processes and promotes resilience, ensuring sustained performance even in challenging market conditions.

Enhanced operational efficiency 

Streamlining processes, optimizing resource utilization, and reducing redundancies across the organization enhance your operations, improve productivity, and create better outcomes.Through working capital management, your business can create clear workflows and continuously monitor performance to align operations with strategic goals. This not only drives cost-effectiveness but also allows the company to quickly adapt to market demands for long-term success.

Stronger supplier & customer relationships 

Maintaining liquidity to meet its short-term obligations via working capital management means you’re making timely payments and fostering trust with suppliers. This reliability strengthens partnerships, leading to better negotiation terms and consistent supply chains. Similarly, optimized working capital enables businesses to offer favorable payment terms to customers, enhancing satisfaction and loyalty.

By balancing cash flow, businesses can create mutually beneficial relationships that support long-term growth and collaboration.

Challenges in managing working capital

While the benefits are clear, managing working capital is not without challenges:

  1. Cash flow constraints 

Insufficient liquidity can lead to missed growth opportunities or delayed payments. Businesses often struggle to balance incoming and outgoing cash, particularly when dealing with fluctuating sales cycles or unexpected expenses. Additionally, relying on credit or slow-paying customers can exacerbate these constraints, straining operational efficiency.

  1. Over-reliance on credit 

Excessive dependence on short-term financing can lead to high-interest costs. This can reduce financial flexibility and leave your businesses vulnerable during low revenue periods. Furthermore, it can create a cycle of dependency that hinders long-term growth and hampers the ability to invest in strategic initiatives.

  1. Inventory management issues 

Poor inventory management disrupts cash flow, as excess inventory leads to increased holding costs, while insufficient stock can damage customer relationships and diminish brand reputation. Balancing inventory levels is critical to ensure liquidity and maintain operational stability. 

  1. Accounts receivable delays 

Late payments from customers hinder cash flow and operational agility. These delays reduce the funds needed for day-to-day operations and strategic investments. Prolonged payment cycles may also increase reliance on external financing, raising borrowing costs and financial risk.

Strategies for working capital management

To overcome these challenges, CFOs and treasurers can adopt some of the following strategies:

  1. Cash flow forecasting & budgeting 

Anticipate future cash needs to avoid shortfalls or surpluses. Tools like cash flow software can streamline projections. Regularly updating cash flow forecasts to align with changing market conditions and organizational priorities, for better decision-making. 

  1. Inventory control techniques 

Implement just-in-time (JIT) or ABC analysis to maintain optimal inventory levels. These methods minimize holding costs and reduce the risk of obsolescence while ensuring that stock levels meet demand. Regular inventory audits and leveraging software solutions can further enhance efficiency and accuracy in inventory management.

  1. Streamlining accounts receivable & payable 

Encouraging faster customer payments by offering early payment discounts, which improve cash flow and reduce outstanding receivables. Additionally, negotiating extended payment terms with suppliers gives you more financial flexibility and improved management of accounts payable.

  1. Leverage financial tools & technology 

Use automated solutions like supply chain finance platforms and electronic invoicing to improve efficiency. These tools streamline payment processes, reduce errors, and provide real-time insights into cash flow, fostering more informed decision-making.

Differences between related concepts

Lastly, it’s crucial to disentangle working capital management from related concepts:

Working capital vs. cash management 

Working capital compares current assets to current liabilities to understand whether the finance team can pay bills and other short-term liabilities. Cash flow measures the cash inflows and cash outflows, as shown in the cash flow statement. 

Working capital vs. capital budgeting 

Capital budgeting focuses on long-term strategic investments, while working capital management is concerned with the short-term, operational aspects of managing a company's current assets and liabilities.

Take control of your working capital today

Working capital management isn’t just a financial principle—it’s the backbone of operational efficiency and business growth. For CFOs, VPs of Finance, Controllers, and Treasurers, understanding and implementing these strategies is vital for maintaining liquidity, optimizing cash flow, and securing a competitive edge.

Find gaps in your working capital strategy? Prioritize stronger relationships with suppliers, streamline receivables, and harness the power of automation to elevate your game. A balanced working capital approach today can fuel unprecedented growth tomorrow.

10
Cash Management
Cash flow management survey 2025: The results are in

To get more insight into the state of AI and automation in cash flow management in 2025, we commissioned a survey of 200 senior finance professionals. Its purpose is to shed light on their current methods, challenges and priorities.

This report was administered online by Global Surveyz Research, an independent global research firm. The survey is based on responses from CFOs, VPs Finance, Directors/Heads of Finance, Controllers, and Treasurers across a mix of industries including tech, E-commerce, real estate, asset- based companies, hospitality, and manufacturing.

Survey participants hailed from companies with an ARR of $50M+ and treasury departments that include 4+ people (25%), 1-3 people (25%), or no treasurers (50%), in the US, UK, DE/FR, and MEA.

What the survey found: Increasing pressure on finance teams to improve efficiency, but continued caution about adopting AI solutions 

The survey revealed that 33% of respondents faced internal operational risks, such as fraud or system breakdowns, over the past year. Additionally, 32% highlighted regulatory constraints, while 27% cited debt obligations with near-term maturities as significant challenges. This convergence of internal and external pressures is compelling organizations to rethink their approach to cash flow management.

To stay resilient, finance teams are focusing on achieving real-time visibility and implementing proactive measures to mitigate risks before they escalate.

According to the survey, areas such as audit and compliance, expense management, transaction categorization, and cash flow forecasting were rated equally as high priorities for AI implementation. These technologies are streamlining traditionally labor-intensive processes, enhancing accuracy, and freeing up valuable resources.

Larger enterprises, in particular, find AI indispensable, as its ability to process vast transaction volumes reduces the burden on finance teams and allows them to focus on strategic decision-making.

The adoption of AI is not without its challenges. Concerns around cost, regulatory compliance, and data reliability remain top of mind for many finance teams. However, the benefits of automation—from error reduction to improved forecasting capabilities—are undeniable. By investing in scalable, AI-driven solutions and prioritizing data quality, companies can future-proof their operations and ensure they are prepared to navigate an increasingly complex financial landscape.

As the 2025 survey highlights, embracing innovation is no longer optional for finance teams. By leveraging AI to overcome liquidity challenges and optimize operations, organizations can transform their cash flow management processes and secure a competitive edge in an era of rapid change. 

Download the full survey report here

5
Cash Management
What controllers need to know about treasury management in pre-treasury teams

At growing companies, or companies with lean finance teams without a dedicated treasury function, controllers often find themselves wearing multiple hats. Without a dedicated treasury team, the responsibility of treasury management often falls on their shoulders. This expanded role requires controllers to not only excel in traditional financial functions but also to master the complexities of managing liquidity, mitigating risks, and ensuring financial stability.

Here’s what controllers in lean pre-treasury teams need to know about taking ownership of treasury management:

Juggling complex treasury operations, with lean resources

Without a dedicated treasury team, controllers must take charge of several critical treasury functions:

  • Cash Management: Ensuring the organization has sufficient liquidity to meet short-term obligations while avoiding excessive idle cash. This involves cash flow forecasting, tracking accounts receivable and payable, and optimizing cash reserves.
  • Risk Management: Identifying and addressing financial risks, including currency fluctuations, interest rate changes, and credit risks. Controllers may need to implement basic hedging strategies and stay vigilant about market trends.
  • Debt Management: Managing loans, credit lines, and other forms of debt effectively, balancing costs and flexibility while ensuring compliance with loan covenants.
  • Investment Management: Making decisions about surplus funds to maximize returns while maintaining liquidity and mitigating risks.

Understanding and taking ownership of these functions empowers controllers to ensure the organization’s financial health in the absence of a treasury team.

Prioritizing cash flow visibility

For controllers handling treasury responsibilities, cash flow visibility is paramount. Accurate, real-time insights into cash positions enable controllers to:

  • Identify and address liquidity gaps.
  • Plan for short-term financing needs.
  • Optimize working capital.

Leveraging tools like cash management systems and enterprise resource planning (ERP) software can provide controllers with a consolidated view of cash across accounts, currencies, and business units. This visibility is crucial for effective decision-making.

Utilizing technology as a resource to work more efficiently

Controllers in lean teams must rely on technology to handle treasury tasks efficiently. Key tools and innovations include:

  • Treasury Management Systems (TMS): Automating processes like cash forecasting, payment approvals, and risk assessments to reduce manual work and enhance accuracy.
  • Robotic Process Automation (RPA): Streamlining repetitive tasks such as bank reconciliations and cash position reporting.
  • Artificial Intelligence (AI) and Machine Learning (ML): Using AI and ML for predictive cash flow analysis, fraud detection, and scenario modeling.

These technologies not only save time but also help controllers manage treasury responsibilities effectively, even in lean setups.

Mitigating financial risks without dedicated resources

Managing risks becomes more challenging without a dedicated team, but controllers can still establish effective practices:

  • Develop straightforward policies for managing foreign exchange and interest rate risks.
  • Stay informed about regulatory requirements to ensure compliance.
  • Utilize basic hedging techniques or financial products to mitigate risks where appropriate.

Controllers should also focus on regular reporting and analysis to monitor risk exposure and adjust strategies as needed.

Collaborating across functions

In lean organizations, collaboration is essential. Controllers must:

  • Work closely with finance and operations teams to gather relevant data.
  • Align treasury responsibilities with broader financial goals.
  • Communicate regularly with executive leadership to ensure transparency and alignment.

Collaboration helps bridge resource gaps and ensures that treasury management is integrated into the overall financial strategy.

Ensuring regulatory compliance and strong governance

Even in lean teams, compliance cannot be overlooked. Controllers must:

  • Stay updated on tax regulations, financial reporting standards, and anti-money laundering (AML) requirements.
  • Implement strong internal controls to prevent fraud and errors.
  • Use technology to streamline compliance tasks and ensure accuracy.

By focusing on governance and compliance, controllers can safeguard the organization’s financial integrity.

Balancing strategic and operational roles

Controllers managing treasury functions must balance day-to-day operations with strategic planning. This includes:

  • Evaluating short-term and long-term financing options.
  • Planning for growth initiatives, such as capital investments or expansions.
  • Assessing the financial implications of key business decisions.

By adopting a strategic mindset, controllers can contribute to the organization’s financial success while managing immediate treasury needs.

Adapting to dynamic financial environments

Economic and market changes can pose significant challenges for treasury management. Controllers in lean teams must:

  • Monitor macroeconomic trends and their potential impacts.
  • Adjust strategies in response to changing interest rates, inflation, or currency fluctuations.
  • Build contingency plans to address unexpected disruptions.

Adaptability and proactive planning are crucial for navigating an ever-changing financial landscape.

Supporting controllers in pre-treasury teams to manage complex treasury operations

Panax is designed for lean teams with complex treasury needs, so it is a perfect tool for controllers who need to manage treasury. Panax utilizes automation and AI to reduce manual work and increase strategic insights, so controllers can have full visibility over all of their cash. Panax makes cash forecasting and budgeting easy, even without a dedicated team. Panax generates reports so that controllers can get a bird’s eye view of their cash situation, but also deep dive into specific entities or currencies, so they can avoid cash risks and optimize liquidity. Get a Panax demo here

10
We use cookies to recognize you, remember your preferences and tailor your use of our website. Information provided by cookies can help us analyze your use of our website and provide you with a better user experience.
Learn more