Familiar Treasury Stories -“I thought we had the cash.”
This article is written by Palm These six words can send a chill down any treasurer’s spine. Despite meticulous planning, even the most experienced treasury professionals face unexpected cash flow surprises that threaten to derail operations. This isn’t just about numbers on a spreadsheet—it’s about ensuring your company meets its financial obligations while maintaining strategic flexibility for growth opportunities. Meet Alex, a Modern Treasurer on the Front Line of Liquidity Alex isn’t new to the pressure cooker of treasury operations. As the corporate treasurer of a multinational mid-market firm, Alex is the nerve center for daily liquidity management, cash forecasting, and bank relationships across multiple entities and currencies. Every day demands clarity, speed, and confidence—especially when the stakes are high and the margin for error is razor-thin. Alex’s performance isn’t measured by just reconciling yesterday’s numbers. It’s about forecasting tomorrow’s with precision, spotting unflagged risks before they cascade, and enabling the CFO with insights that go beyond reporting. In a role plagued by disjointed systems, manual processes, and fragmented data, Alex is constantly navigating the thin line between reactive firefighting and strategic foresight. What keeps Alex up at night? Surprises that weren’t in the system. A missed tax payment. A misclassified receivable. An unexpected legal settlement. Each one an operational glitch that could snowball into a financial bottleneck. This story follows Alex’s day—not in an ideal future, but in the real, everyday challenge of trying to run modern treasury with yesterday’s tools. The Hidden Challenge of Modern Treasury Management For treasurers like Alex, cash forecasting isn’t merely a technical exercise—it’s a daily balancing act requiring foresight, cross-functional collaboration, and rapid adaptation when things go sideways. Let’s examine what a typical day looks like when cash forecasting systems fail to deliver the visibility modern treasurers need. Morning Crisis: The Unflagged Tax Payment That Changes Everything Alex’s day begins with a routine check comparing yesterday’s forecast against actual cash movements. Immediately, a problem emerges: a significant tax adjustment has hit the accounts without warning. It wasn’t forecasted—and worse—it wasn’t communicated. The consequences cascade quickly: While Alex manages to avert disaster, the scenario raises crucial questions: Why wasn’t this recurring tax payment automatically flagged? Why must treasurers rely on last-minute updates from other teams? Mid-Morning Reality: When Accounts Receivable Forecasts Meet Reality Later that morning, Alex reviews upcoming cash inflows. The AR forecast looks promising—perhaps too promising. Experience has taught Alex to verify rather than assume. A closer look reveals that three of ten expected invoice payments belong to customers with consistently slower payment cycles. This small but critical insight allows Alex to update the forecast: seven invoices remain as scheduled inflows, while three are marked “likely but uncertain.” This adjustment—blending data with real-world insights—creates a forecast that reflects reality rather than wishful thinking. Afternoon Challenge: Forecasting the Unstructured and Unexpected Even with robust processes, treasurers know that certain events will always exist outside the system. Sudden vendor settlements, severance payments, or legal payouts rarely appear in ERPs or accounting software until it’s too late. These financial surprises typically originate in emails, informal conversations, or departmental meetings—and frequently arrive after decisions have been made. While current forecasting tools excel at processing structured data, they struggle with these contextual, unstructured inputs that often have the greatest impact on cash position. The Collaborative Nature of Effective Cash Forecasting Treasury doesn’t operate in isolation. Accurate forecasting depends on timely inputs from accounts payable, payroll, tax departments, and sales teams. Yet collaboration remains one of the greatest challenges: The solution isn’t just better technology—it’s a fundamentally better approach to treasury collaboration. What Treasury Teams Actually Need: Insights From the Field Through extensive conversations with treasurers across industries, we’ve identified six consistent requirements for effective cash forecasting: 1. Complete Visibility of Unbooked and Recurring Payments “Short-term forecasting is about managing cash position. If you miss a significant payment, your entire day can unravel.” — Amanda, Treasury Lead Modern treasurers need systems that capture both recorded transactions and those still making their way through approval processes. 2. Reality-Based Forecasts Instead of Assumptions “Sales might show bookings in the pipeline, but are those contracts signed or still in negotiation? That distinction makes all the difference for accurate cash forecasting.” — David, Treasury Director Effective forecasting distinguishes between committed, probable, and possible cash movements—providing both clarity and confidence. 3. Flexible Systems That Support Manual Adjustments “You need the flexibility to input one-off items that don’t fit standard categories—otherwise, you’re essentially guessing.” — Tom, Senior Treasury Manager The best forecasting systems combine automation with human oversight, allowing treasurers to apply judgment where it matters most. 4. Transparent Data Sources and Methodology “If I know exactly where my forecast data originates—80% from ERP, 10% manual inputs, 10% machine learning—I trust it more and can explain variances more effectively.” — Lucía, Treasurer Confidence in forecasts comes from understanding how they’re constructed. 5. Context-Aware Automation That Learns “Machine learning that could remind me that March typically means tax payments based on historical patterns—that’s a complete game changer for proactive management.” — Tom, Senior Treasury Manager Intelligent systems that recognize patterns and provide early warnings represent the future of treasury management. 6. Built-In Variance Analysis and Reconciliation “I need to understand why we missed a forecast. That analysis is how we continuously improve our accuracy.” — Every treasury professional we’ve ever spoken with Learning from forecasting misses is as important as the forecast itself. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below. Notice: JavaScript is required for this content.
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Understanding collateral: A guide to secured FTFs
This article is a contribution from our content partner, TreasurySpring The repo market: The foundation for secured FTFs The $10 trillion+ repo market is a critical source of short-term funding for banks, allowing them to access liquidity while providing security to lenders. Historically, access to secured funding through the repo market has been limited to large banks and capital markets institutions with billions of assets to invest. TreasurySpring has unlocked this asset class for cash investors who previously had no access, enabling a broader range of businesses to benefit from the additional protection typically offered by secured investments. What’s the difference between a secured and unsecured FTF? TreasurySpring offers a diverse range of Fixed-Term Funds (FTFs) for clients to make cash investments in. Each FTF provides exposure to an underlying investment, such as a Term Deposit, Commercial Paper, Treasury Bills, and other short-term cash investment instruments (Underlying Investments). One category of FTFs involves lending to financial obligors (banks), which can be broken into two main categories: The key distinction is that a secured FTF can offer protection, reducing exposure to obligor credit risk and improving capital preservation. Depending on their risk appetite, FTF investors can choose between unsecured FTFs, which may offer higher yields or collateral-backed secured FTFs, which can provide greater security than equivalent unsecured products. The role of collateral in secured FTFs Collateral is the term used to describe the asset or pool of assets delivered by the obligor (in this case, a bank) as security to protect the lender (in this case, the TreasurySpring cell company in which the FTF is held, and ultimately a cash investor on the TreasurySpring portal). A simple way to understand how collateral works is to compare it to a mortgage. When a bank lends money to a homebuyer, the mortgage is secured against the house—the house serves as collateral for the bank providing the loan. If the borrower defaults, the lender has a claim over the house and can sell it to recover the outstanding loan. The same principle applies to secured FTFs: collateral acts as a safety net, ensuring that if the obligor fails to repay, there should be a pool of assets that can be liquidated to recover the outstanding Underlying Investment. Collateral provided against a secured FTF is monitored and maintained by a neutral third party, known as a tri-party agent—for example, Clearstream—which is intended to ensure transparency and trust. Collateral coverage ratios The collateral coverage ratio represents the value of the collateral relative to the Underlying Investment. A ratio above 100% indicates that the collateral value exceeds the Underlying Investment value. For example, if an investor subscribes £10m into a secured FTF on the TreasurySpring portal that has a collateral coverage ratio of 105%, the obligor (the bank) would need to provide at least £10.5m worth of collateral to the tri-party agent. The collateral is monitored and revalued intraday by the tri-party agent to ensure its value always meets or exceeds the agreed collateral coverage ratio, with additional assets being required from the obligor (the bank) if the value of the collateral decreases in value below an agreed threshold. What assets qualify as eligible collateral? To determine what assets qualify as eligible collateral to secure the Underlying Investment, a collateral schedule is pre-agreed between TreasurySpring and each obligor. These agreements specify factors such as asset type (e.g., debt instruments or equities), country of issuance, and currency denomination. After a client selects an FTF within the TreasurySpring portal, they will see a high-level summary of the relevant collateral schedule, referred to as ‘Collateral Information.’ This provides an overview of the assets that qualify as collateral to secure a particular FTF. It’s important to note that while a collateral schedule may allow for multiple currencies or different types of debt securities, not all of these assets will necessarily be used as collateral. They provide the obligor (the bank) with the flexibility to deliver a mix of collateral assets as long as they remain within the agreed schedule and that the collective value of those assets meets or exceeds the collateral coverage ratio. Conclusion TreasurySpring’s platform provides unique access to secured cash investment options, Secured FTFs, previously unobtainable by most firms. This enables our clients to mitigate risk in their cash investment portfolio and consider returns on a risk-adjusted basis. Secured FTFs can provide significantly better risk-adjusted returns than comparable unsecured options, as the Underlying Investments are backed by collateral. If you’d like to learn more about secured FTFs and their benefits, please don’t hesitate to reach out to a member of the TreasurySpring team. Also Read Join our Treasury Community Treasury Masterminds is a community of professionals working in Treasury Management or those interested in learning more about various topics related to Treasury Management, including Cash Management, Foreign Exchange Management, and Payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.