5 min

Data connectivity for finance: everything you need to know

Author
Sefi Itzkovich
Published
Aug 29
, 
2024

Key Takeaways

  1. Seamless data connectivity is vital for enhancing financial decision-making by ensuring that accurate information is readily available across all platforms.
  2. Integrating data across various financial systems improves data accuracy and enables more comprehensive financial analysis.
  3. Real-time data connectivity significantly boosts operational efficiency by allowing quicker responses to financial changes.
  4. Ensuring secure data handling is critical in finance to protect sensitive information and maintain compliance with regulations.

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.
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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

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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. 

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Automation
Who needs treasury automation anyway?

Sooner or later, finance operators discover that, as their companies grow, managing daily treasury operations becomes increasingly complex and time-consuming.

Daily tasks and operations, such as cash positioning and reporting, accounts balancing, payments, and FX conversions, begin to pile up and become challenging to manage manually. Teams that wish to maintain full visibility and control resort to spending more and more of their precious time and resources on these labor-intensive chores. Time that could be better spent on more strategic tasks.

The solution is simple, yet critical: automating treasury processes.

After speaking with over 200 CFOs, treasurers, and finance leaders, we've identified two key types of complexities that make it impossible to scale efficiently, and make the need for automation abundantly clear.


Cash Footprint

Companies that own multiple accounts, spread their financial activities across several banking partners, platforms (processors, expense managers, wallets, etc.), legal entities, or currencies, find it virtually impossible to run even basic performance analyses – like getting a snapshot of their current cash position.

To add to this complexity, building direct cash reports manually, in an effort to ensure full control, explain current position, and understand cash trends – is borderline hopeless. 

The amount of data collection and processing, as well as the work required to create these critical visibility tools, brings companies to reduce their reporting cadence. In other words, instead of a daily cash position and weekly cash reports, companies opt for bi-weekly, monthly, or even quarterly reporting frequency.

This means that by the time these companies look at their numbers, they are already far behind the curve and any decision their teams take is based on lagging data. 

Imagine your life if Waze told you to make a right turn 10 minutes after you passed the junction. Useless, right?


Cash Flow Complexity

Finance teams that deal with the following complexities:

  1. Growing volumes of inflows and outflows
  2. Significant working capital – inventory, long collection cycles, prepayments, etc
  3. Capital intensive businesses, with high CAPEX or frequent M&As
  4. Credit lines, loans, or cash deposits that are baked into their financial structure

These are just a few examples for cash flow complexities that call for constant monitoring of past, present, and future cash flows. Finance teams in these companies have to make daily, time-draining decisions to ensure that the timing of their inflows meets the timing of their outflows in an optimal way. 

But to make informed decisions, finance teams must have an accurate cash position and a detailed rolling cash-flow forecast, and manual maintenance of these processes simply doesn’t cut it anymore. Reducing reporting granularity levels or cadence are not the solution either, because getting it wrong means higher interest payments on credit lines, lower interest income on interest-bearing accounts, unnecessary fees, more unpleasant surprises, and higher level of risk to relationships with both suppliers and customers. 

Bottom line – higher costs, lower profit, increased risk.

If you can identify with any of the above challenges, don’t stress and know there’s a better way. Cash flow and treasury management processes don’t have to be painfully lengthy, and automating them can actually help your company meet critical performance KPIs while freeing your time to focus on bigger, better things.

To learn more about the future of treasury management and the automation tools you have to get familiar with in 2024 contact us today.

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Cash flow management automation, why now?

Finance and treasury teams have always been managing treasury operations, even before Excel came into existence.

Tracking payments, making intercompany transfers, hedging currency risks, and managing debt and investments aren’t new tasks. Moreover, many of these tasks are repetitive, inefficient, time-consuming, and error-prone. But still, up until recently, mid-size companies and small enterprises used manual processes to track, monitor, and manage cash flow, leaving automated treasury management systems to large enterprises.

This trend is now shifting, with more mid-size and small enterprises companies looking for ways to automate their treasury and cash flow management. And for good reason – a number of important developments make cash flow management more critical than ever for these businesses, creating a strong incentive to optimize and automate processes:
‍

Rising interest rates

The end of ZIRP and rising interest rates, create a need to manage both cash reserves and debt more efficiently. There’s a huge incentive to optimize yield on one hand and minimize cost of capital on the other. 

Poor cash management leads to significant losses and missed income opportunities for companies that hit the bottomline harder than ever before in the last 15 years. Another possible contributor, also related to the end of ZIRP, is that capital became more scarce, which means the need to efficiently manage existing capital has become greater.
‍

Globalization

Companies are going global at an increasing pace, opening off-shore accounts,e and transacting in more currencies than ever before. This global movement opens up a much wider pool of opportunities for commercial expansion on the one hand, but on the other - it also creates a more decentralized cash footprint, which is much harder to track and manage. 

So while the world is becoming smaller, finance teams' workload is blowing up to almost unmanageable proportions.
‍

Increased counterparty risk

SVB and FRB’s implosion turned the spotlight on banks’ financial stability. This means that knowing that your company’s cash is stored in a reputable bank is simply no longer enough. Because of that, more boards and management teams are demanding that finance leaders adhere to a strict policy, and hedge against counterparty risk by opening and managing accounts across multiple banks. 

This “placing your eggs in multiple baskets” strategy, while mitigating some risks, also makes it more challenging for finance teams to track and manage cash flow, creating an increased demand for real-time cash visibility and control.


Final thoughts

The convergence of the trends above, coupled with the accelerating availability of banking APIs and other open banking solutions, are enabling new and improved solutions that better fit the needs of mid-size companies. 

There’s an unprecedented opportunity for finance leaders to act now and get rid of manual, error-prone, time-consuming processes. Automating your treasury operations is how you can enable your company to save precious time, regain control, and most importantly – improve your capital efficiency. It’s high time to get smarter.

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Adapting to the times: critical role of real-time Working capital management

In today’s current interest rate climate, finance teams are well aware that investing surplus cash can significantly contribute to the company’s overall financial performance. Many companies establish an investment policy and negotiate with their banking partners to maximize interest rates that they get on various products – from money market accounts to term deposits, and even funds held in their checking accounts. Yet, the interest rate is only one part of the yield equation, the other part is the amount that’s invested.

In an earlier blog post, we explored various ways to optimize buffers and manage cash across multiple accounts. The focus of this post is on another highly effective but often overlooked method for maximizing invested cash – proactive working capital management.
‍

Working capital definition

‍
Working capital (defined, for the purpose of this post, as accounts receivable + inventory - accounts payable) is definitely a tough nut to crack. While interest rate negotiations and intercompany money movements fall under the sole control and responsibility of the finance team, working capital doesn’t. It involves other departments and stakeholders: the sales team influences customer payment terms, the operations and supply chain teams define the inventory policy, and various stakeholders influence supplier payment terms.

This causes many finance teams to avoid facing the challenge of optimizing working capital. When interest rates were close to zero it didn’t matter that much. But things have changed. Every dollar that can be freed up from working capital and invested in interest-bearing accounts is now translated into interest income that directly contributes to the company's bottom line.
‍

Real-time working capital management is crucial for businesses to quickly adapt to market volatility and optimize their liquidity, ensuring sustained financial health


Before initiating any steps to unlock cash from working capital, it’s imperative to understand the potential impact. While working capital can never be zero, calculating the actual value of working capital and monitoring changes and trends over time is key. There are two important benchmarks to consider:

  1. Comparing working capital against your company’s historical performance. This can help the team identify root causes and other key issues that need to be addressed. 
  2. Comparing your company’s working capital to external benchmarks. Public companies that operate in a similar space can serve as a great benchmark. If your company’s WC consistently exceeds that of its peers, that should raise a red flag right away.
     

After the initial benchmarking, it’s critical to start measuring relevant KPIs on an ongoing basis. DSO and DPO are a good starting point, but these metrics are usually only calculated monthly after the month-end closing (or even worse, quarterly!), rendering them difficult to act upon in real-time. Introducing real-time, actionable metrics such as weighted average days to cash (WADTC) and weighted average days to pay (WADTP) can help finance teams identify issues quicker and respond more effectively.

Once the right metrics are in place and a continuous monitoring process implemented, teams can easily uncover opportunities for working capital improvement and take action. Since working capital is often a cross-company responsibility, it becomes crucial to communicate the KPIs and status with everyone involved to secure buy-in and accountability.


Wrapping things up 

The current market condition, with high interest rates in the foreseeable future, provides a significant incentive for every finance team to streamline its working capital management. Although things can get quite messy at times , defining the right KPIs, monitoring them on an ongoing basis, and communicating the underlying causes to the organization are all critical factors needed to release precious cash from working capital. 

Every dollar that’s freed up can be leveraged to reduce interest costs or invested to generate interest income. Either way, it’s pure cash flow and the moment to take action and act on this opportunity is now.

‍

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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).

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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.

Naomi Goldberg
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. 

Naomi Goldberg
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. 

Naomi Goldberg
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