The U.S. Government Shutdown: What It Means for Corporate Treasury? With Real-Life Examples
From Treasury Masterminds When Washington grinds to a halt, the consequences ripple far beyond politics. For treasurers, a U.S. government shutdown touches the very systems that keep cash flowing — from federal payments to short-term funding markets. Cash flow jitters and market liquidity Each day the government stays closed, agencies delay payments to suppliers and contractors. The U.S. Treasury has warned that the shutdown is “starting to affect the real economy.” Estimates put the drag in the billions per week as federal activity slows and vendor payments back up. For companies doing business with the public sector, that means slower inflows and tighter liquidity; for others, reduced public spending can weaken downstream demand and pressure working-capital cycles. FedNieuwsNet Treasury yields and investment portfolios Historically, longer-dated U.S. Treasury yields tend to edge lower during shutdowns as investors seek safety (the effect is usually modest). In this episode, the long end has again drifted down — the 30-year recently touched its lowest level since April — while shorter tenors can be choppier around funding dates. For treasurers managing liquidity portfolios, keep an eye on curve shape and the balance between short-term placements and duration. Debevoise Operational and tax disruptions With a large portion of the IRS furloughed, refunds and audit processes are slow, complicating cash-flow timing for corporates expecting repayments or clearances. SEC filing deadlines still apply (EDGAR remains open), but staff review, comment letters, and many interpretive functions are curtailed — a planning issue for capital-markets activity and disclosure timetables. CBIZ+2SEC+2 What companies are saying right now (hard evidence) These disclosures matter because they translate headlines into concrete treasury levers: draw/roll CP, re-cut outlooks, slow capex/program ramps, and tighten operating costs to defend liquidity. Confidence and communication Uncertainty erodes confidence faster than any macro indicator. Internally, treasurers who can explain liquidity buffers, committed lines, and plausible downside cases help leadership stay calm. Externally, maintain active dialogue with banks and investors; show where you have flexibility (working-capital programs, issuance windows, investment policy) if government-related cash receipts slip. The Mastermind view Shutdowns rarely trigger full-blown crises, but they do stress-test fundamentals: Those with solid forecasting, diversified funding, and active bank dialogue will feel the tremors — not the quake. Also Read Join our Treasury Community Treasury Mastermind is a community of professionals working in treasury management or those interested in learning more about various topics related to treasury management, including cash management, foreign exchange management, and payments. To register and connect with Treasury professionals, click [HERE] or fill out the form below to get more information. Notice: JavaScript is required for this content.
Franklin
Driving Blind: Managing Finances Through the Rear-View Mirror
This article is written by HedgeFlows Picture this: You’re driving down a busy highway, but instead of looking ahead at the road, you’re making all your steering decisions based solely on what you can see in your rear-view mirror. Sounds terrifying, right? Yet this is exactly how most small and medium enterprises (SMEs) manage their business finances. The Great Divide: Compliance vs. Planning In large corporations, there’s typically a clear organisational split that addresses both aspects of financial management: This division makes sense—both functions require different skill sets, mindsets, and priorities. Compliance is about accuracy, adherence to standards, and meeting deadlines. Planning is about analysis, strategic thinking, and managing uncertainty. The SME Reality: Stuck in Compliance Mode For most smaller businesses, the finance function is heavily weighted toward compliance activities. This isn’t necessarily by choice—it’s often driven by necessity: Why compliance dominates: The people hired to handle these functions naturally develop expertise in compliance. They understand the value of accurate bookkeeping, timely tax submissions, and proper audit trails. They know what goes wrong when these fundamentals aren’t managed correctly. The Growth Challenge: When Looking Back Isn’t Enough As businesses scale, however, the need for forward-looking financial management becomes critical. This is where many SMEs hit a wall. The typical evolution: Where the System Breaks Down Even when businesses recognise the need for better financial planning, execution often falls short. Here’s why: Competing priorities plague finance teams: Meanwhile, critical forward-looking activities get consistently deprioritized: It’s human nature—when you’re overwhelmed, you default to what you know and what has immediate consequences. The Hidden Cost of Financial Myopia Operating primarily in “rear-view mirror mode” creates severe, measurable business impacts: Missed opportunities that directly hit the bottom line: Financial risks that create cash flow volatility: Strategic limitations that compound over time: The Modern Solution: Integration and Expertise The good news? Today’s technology and advisory landscape offer practical solutions for SMEs ready to balance their rear-view and forward-looking capabilities. Leverage modern treasury tools: Partner with specialized advisors: Build hybrid capabilities: The Path Forward: Balanced Financial Vision The most successful growing businesses don’t choose between compliance and planning—they excel at both. This requires: Cultural shift: Recognising that planning activities are as critical as compliance tasks Process integration: Making forward-looking analysis a standard part of financial operations Technology adoption: Implementing tools that make planning as straightforward as reporting Skill development: Building teams that can handle both backward and forward-looking responsibilities Taking Action If your business is stuck in rear-view mirror mode, consider these immediate steps: Remember, effective financial management requires both clear vision of where you’ve been and where you’re going. In today’s fast-moving business environment, companies that only look backward will find themselves falling behind competitors who have learned to drive with their eyes on the road ahead. The question isn’t whether you can afford to invest in better financial planning—it’s whether you can afford not to. After all, if you’re always looking backward, who’s driving your business forward? 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.