Cash Conversion Cycle Calculator: Helping Businesses Unlock Trapped Working Capital and Make Trade Cheaper, Faster and Simpler
This article is written by ETR Digital For many businesses, a significant proportion of their working capital is tied up in inefficient or outdated trade processes. And in today’s world, the need to be agile and resilient in pursuit of improved financial performance is essential. The Cash Conversion Cycle Calculator (Calculator) helps businesses identify trapped liquidity and release it by leveraging the financial benefits of digital trade instruments. The Calculator is simple to use, taking just minutes to help corporate treasurers, accountants and finance professionals measure how quickly their business converts its investments in inventory and other resource inputs into cash flow from sales. Highlighting any bottlenecks, it helps them unlock ‘trapped’ cash tied up in inefficient, paper-based or outdated trade processes such as delays in invoicing, payments, and settlement times. By digitalising transactions, in line with the Electronic Trade Documents Act 2023 (ETDA), businesses can significantly reduce these delays, free up significant amounts of working capital, drive operational efficiency, and increase their profitability. The Rt Hon. the Lord Thomas of Cwmgiedd notes: “The ETDA provides the legal foundation for trade digitalisation and the benefits that flow from it. However, the realisation of those benefits can only come when traders actually use digital systems. This tool [the Calculator] is a simple, speedy and helpful aid that will enable traders to make an initial assessment of the benefits that can be realised. I am sure that those who use it will quickly see the benefits and thus contribute to the achievement of the objectives of the Act.” Chris Southworth, Secretary General, ICC UK adds: “One of the most effective, but often overlooked, digital solutions in the treasury and finance toolbox are negotiable instruments. Traditionally, these instruments (e.g. bills of exchange and promissory notes) have been paper-based, but reborn in digital form thanks to the ETDA, they represent a major shift in how businesses transact and manage their financial assets.” Digital negotiable Instruments (DNIs), which are securely recorded on electronic platforms, enable faster, more transparent, and cost-effective transactions. By shortening the cash conversion cycle using digital bills of exchange and digital promissory notes, businesses can accelerate cash inflows and streamline their payment processes, thereby optimising working capital and improving liquidity. This digital approach not only improves the speed of trade and supports ESG goals by eliminating paper, it also reduces the risk of fraud, ensuring that all parties involved in a transaction have secure access to the same information. The Calculator helps a business to assess just how much of its working capital could be unlocked. If the figures indicate that improvements could be made, making contact could be the first step towards improved liquidity and financial performance. Patrick Kunz, Founder of the Interim Treasury Network, Pecunia Treasury & Finance, comments: “Working capital is a big driver of cash for a company. As a treasurer it therefore has my focus. Though I am not in the lead for reducing DSO and/or total CCC, these are interesting metrics to know and calculate. The online tool provided by the IC4DTi and ETR Digital lets me easily calculate these WC metrics. “As an extra, I can also calculate the cash effect of reducing my CCC (i.e. increasing my DPO, reducing DSO). This shows me how it is worth investing into reducing the CCC and the monetary savings it can lead to. All this is then put into a PDF report, which is directly shareable with the CFO. It is an amazing starting point to get a grip on working capital KPIs and the cash effect they can have by improving your CCC (and reducing your working capital).” Our partners at ETR Digital, who developed the Calculator, will kindly donate £5 to our charity of the year – Cancer Research UK – for every business that completes a Calculation cycle and contacts us using a verifiable business email address. The Calculator can be found here. https://ic4dti.org/getting-started-ccc/ Editor’s Note The International Centre for Digital Trade and Innovation (iC4DTI) is an independent, not-for-profit Community Interest Company established to drive the digital transformation of trade on a global scale. It is a partnership which includes five government departments with industry and academia and acts as a global benchmark on how to accelerate the implementation of trade digitalisation in support of the ICC Digital Standards Initiative at the international level. Launched in December 2024, iC4DTI builds on the success of the Centre for Digital Trade and Innovation (C4DTI), which was co-founded in 2022 by ICC United Kingdom, HM Revenue and Customs, Tees Valley Combined Authority and Teesside University. Originally established as a UK-based public–private partnership, the Centre evolved into an international body in response to growing global demand, particularly from emerging economies for guidance, expertise and practical support in modernising trade. ICC United Kingdom is the representative office of the International Chamber of Commerce (ICC) in the UK. ICC is the largest world business organisation, representing 45 million companies, employing over 1 billion people in 170 countries with ICC rules underpinning $17 trillion of world trade. ETR Digital specialises in improving cash conversion cycles for corporations and financial institutions by utilising newly legislated digital negotiable instruments. Their solutions help companies enhance liquidity, reduce operating costs, and improve EBITDA by optimising working capital. ETR Digital also supports clients in improving their credit ratings and complying with IFRS and ESG standards, while offering automation to increase process efficiency by up to 80%. Their technology delivers tangible results with no implementation costs and scalable solutions for global operations. Reporters should contact: ICC United Kingdom – Tom Lane, Thomas Lane tom@thomaslanecomms.com ETR Digital – Dominic Broom CEO, dominic.broom@etr.digital 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. 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Franklin
International Payment Fraud Is Rising — A Wake-Up Call for Corporate Treasurers
A recent Guardian article (link) reveals a troubling new pattern: while domestic fraud in the UK is starting to decline thanks to regulatory changes and reimbursement frameworks, international payment fraud is climbing fast — especially via Authorised Push Payment (APP) scams. According to UK Finance, losses from international APP fraud nearly doubled last year. For treasurers handling high-value, cross-border payments, this isn’t just another warning headline — it’s a call to action. Why Should Treasurers Care? Fraudsters are shifting their focus. With tighter controls and consumer protection now in place for domestic payments, corporate and cross-border flows are the new frontier. Corporate treasury teams — typically responsible for approving or initiating large vendor payments, payroll runs, and intercompany transfers — are increasingly in the firing line. A single fraudulent instruction can cost six or seven figures, and the chances of recovery are slim once funds leave domestic clearing systems. Unlike retail consumers, corporate victims are rarely reimbursed. There are fewer safety nets, especially when payments cross borders. The Risks Lurking in Your Payment Process Some of the most common weaknesses exploited in corporate fraud cases include: These risks increase as treasury departments become leaner and more digital. Automation brings efficiency, but also reduces human checkpoints — giving fraudsters a clearer runway. What Can Treasurers Do? Payment fraud prevention is no longer just an IT or finance operations issue — it’s a treasury concern. Treasurers should consider: One such tool is Verification of Payee (VoP) — a process increasingly used in domestic markets to validate that the account name matches the account number before a payment is executed. While still limited in cross-border coverage, it represents a step in the right direction. Learning More: The Broader Anti-Fraud Landscape VoP is part of a wider conversation around payment fraud prevention. For treasurers interested in exploring these developments, a recent webinar brought together industry experts — including a corporate treasurer and a European CoP (Confirmation of Payee) specialist — to discuss VoP’s role, its limitations, and how it fits into a broader fraud prevention strategy. Register here to join a masterclass about this topic:🎥 Masterclass on VoP and Payment Fraud Final Thought As fraudsters get more sophisticated, so must treasury teams. If your international payments process hasn’t been reviewed in the past 12 months, now is the time. The fraud shift is clear: domestic systems have been tightened. Cross-border payments are now the weak spot. And for treasurers, ignoring that is a risk no risk manager should accept. 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.
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.
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.
Why Successful Treasurers Integrate FX Risk and Cash Management
This article is written by Kantox As treasurers watch global equity, credit, and FX markets wobble on each utterance from U.S. President Donald Trump, they quietly prioritise cash and liquidity management tasks. Meanwhile, recurrent episodes of financial volatility are putting the spotlight on the multifaceted interactions between FX and capital markets. Whether FX liquidity falls on “tariff volatility”, CHF reaches record highs across the board, or DKK weakens against EUR, you get the point: currency markets considerations are top of mind as treasurers beef up their cash and liquidity management capabilities. We can only expect more such episodes going forward. Micro-hedging and cash flow forecasts Amidst the flurry of reactions to Mr Trump’s tariff measures, Shopify, the U.S.-based e-commerce platform, is decidedly embarking on a policy to sell in more currencies. Although we are not privy to any information on the matter, the firm’s Form 10-K says it loud and clear: “We have launched localised pricing plans in select countries where we bill in local currency in order to reduce friction and attract more merchants to our platform. As our operations continue to expand internationally, we may observe additional risk in other foreign currencies” — Shopify As the treasury team updates its 30, 60 and 90-day cash flow forecasts, the FX element coming from foreign sales will introduce an added element of instability. While textbooks suggest hedging the transaction cash flow exposure, things are more complicated in real life. To begin with, the relevant data may be located in different company systems: ERP, TMS, and spreadsheets. On top of that, a rule for aggregating exposures is needed. And what about forward points management? CHF trades at a forward premium to USD, but BRL does so at a deep discount. This requires different approaches. There is a way out of these practical dilemmas. Micro-hedging programs provide finance teams with the flexibility to remove any FX-related uncertainty in their cash flow forecasts. This is because they rely on API connectivity to capture the exposure from any company system, delaying hedge execution when needed. The ‘cash flow moment’ of FX risk management In the magic world of textbooks, there is no time lapse between the settlement of a commercial transaction and the corresponding FX derivatives instrument. But real-world treasurers know it too well: most of the time, a lot of swapping is required. Time and again, we encounter situations where members of treasury teams manually execute the time-consuming transactions needed to perform early draws on existing forwards, or to rollover existing forward positions (much more on this specific topic in our next blog). The good news is that relief is at hand. Swap execution that comes with Currency Management Automation frees up resources and removes operational risks and costs. Whether they anticipate or roll over FX derivatives transactions linked to payments / collections, treasurers can execute the process in just one click. With complete visibility and control, the finance team obtains: A liquidity management upshot As they embark on the journey to sell in the currency of their clients and buy in the currency of their suppliers, firms like Shopify are in for a pleasant surprise. The decision is likely to yield benefits that go beyond the aims of “reducing friction and attracting more merchants to our platform.” The strategic orientation to use more currencies in commercial operations also produces a number of liquidity management and working capital-related benefits. In this age of Trade Policy Uncertainty, these advantages seem compelling enough: Ensuring liquidity at all times Now consider the case of the global pharmaceuticals, biotech, healthcare, and cosmetics company Gerreshimer. (Again, we are not privy to any information on their FX policies). In the 2024 Annual report, we read that the German group’s finances are: “… controlled and optimised centrally […] Our primary goal is to ensure liquidity at all times by procuring funding on a centralised basis and actively managing foreign exchange risks and interest rate risks” — Gerresheimer This is a model for a well-organised treasury governance setup. Here, again, we can report good news from the treasury technology front. Scalable tools that were once exclusive to large enterprises make it possible for any firm with foreign subsidiaries to implement solutions like Kantox In-House FX. The main benefits include: Conclusion: numerous and meaningful touch-points By introducing a neat distinction between tasks, most treasury surveys enumerate sets of priorities that are seemingly separated from each other. Courtesy of various crises, cash and liquidity management issues have consistently claimed a top position in most rankings. But are these treasury surveys taking the right approach? This blog showed that a clear separation of treasury tasks does not correspond to the real world. The touch-points between FX risk management and cash and liquidity management are too numerous and too meaningful to ignore. It is only when we abandon the siloed approach between tasks that we realise how much technology is bridging the gap between FX risk management and cash and liquidity management, to the point of making them virtually inseparable. 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.
Open Banking: A Missed Opportunity for Corporate Treasurers in the UK and EU?
By Treasury Masterminds Open banking, heralded as a transformative force in financial services, has yet to deliver its full potential, particularly for corporate treasurers in the UK and EU. While the concept promises enhanced data sharing, streamlined financial processes, and improved efficiency, the reality has been marred by slow adoption, regulatory challenges, and technical complexities. Slow Adoption: A Global Perspective In the UK, open banking’s journey began with regulatory mandates aimed at fostering competition and innovation. However, consumer adoption has been tepid. For instance, in March 2025, open banking payments totaled just 27 million, a stark contrast to the 1.92 billion card transactions in February. This disparity underscores the challenges in shifting established payment behaviors. Similarly, across the EU, the implementation of open banking has been inconsistent. Countries like France and Spain have made strides, but others lag due to varying regulatory approaches and market readiness. As adoption remains slow in both regions, businesses—including corporate treasurers—find it difficult to justify the investment in open banking systems without a proven, widespread user base. Challenges Hindering Adoption Several factors contribute to the sluggish uptake of open banking: 1. Lack of Consumer Incentive While open banking offers numerous advantages—such as enhanced control over payments, greater transparency, and better access to financial products—the incentives for consumers to adopt it have not been compelling enough. Corporate treasurers, too, face challenges as businesses are often risk-averse when adopting new technologies without clear, measurable benefits. Despite regulatory efforts, adoption remains slow. Without a strong consumer push to adopt open banking services, businesses find themselves unable to leverage the full potential of the systems. 2. Security and Privacy Concerns Security remains one of the most significant barriers to the adoption of open banking. For consumers and businesses alike, trusting banks and fintechs with sensitive financial data is no small matter. The idea of open APIs that allow third-party providers access to banking information raises serious concerns over data privacy, identity theft, and fraud. 3. Fragmented Standards Open banking, as it currently stands, is far from a one-size-fits-all solution. In both the UK and EU, there is no uniform technical standard across financial institutions. Different banks have adopted different API frameworks, authentication mechanisms, and data-sharing protocols. This fragmentation means that businesses and treasury teams have to deal with varying levels of integration complexity when trying to connect with multiple financial service providers. 4. Regulatory Complexity Open banking is heavily regulated, with different requirements and standards across countries. The EU’s Revised Payment Services Directive (PSD2) governs the open banking landscape, but its interpretation and enforcement differ from one country to another. Similarly, the UK has its own regulatory framework post-Brexit, which complicates cross-border adoption. 5. Lack of Readiness Among Banks and Fintechs While the regulatory environment may be pushing for open banking, many banks and fintechs have been slow to fully embrace and implement the necessary systems. Many banks still operate with legacy technology, which makes it difficult to integrate open banking APIs into their infrastructure. Additionally, fintechs, while innovative, often lack the resources or expertise to develop secure, reliable APIs that comply with all relevant regulations. 6. Adoption Costs Implementing open banking can require a significant upfront investment. While it promises cost savings and efficiencies in the long run, many businesses—especially SMEs—are deterred by the initial costs of setting up the necessary infrastructure. For corporate treasurers, investing in the technology to integrate open banking systems into their TMS (Treasury Management Systems) may seem like a luxury if they are not convinced of the short-term returns. Looking Ahead Despite these challenges, there is cautious optimism. The EU’s proposed Financial Data Access (FIDA) regulation and the UK’s Data Use and Access Bill aim to standardize data sharing practices, potentially paving the way for more cohesive open banking ecosystems. For corporate treasurers, staying informed about these developments and actively engaging with industry initiatives will be crucial in leveraging the benefits of open banking as they materialize. Conclusion Open banking holds significant promise for corporate treasurers in the UK and EU. However, realizing this potential requires overcoming existing barriers related to adoption, integration, and regulation. With concerted efforts from regulators, financial institutions, and businesses, open banking can evolve from a concept to a cornerstone of modern corporate finance. 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. 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Cash Forecasting in Treasury Management with AI and Automation
This article is written by our content partner, Nilus Cash forecasting used to be a “nice to have.” Now it’s survival mode. Whether you’re a public company, a multinational corporation, or a fast-growing startup, your treasury team can’t afford to fly blind. Visibility into future cash flows isn’t just helpful, it’s how you plan for growth, manage risk, and avoid nasty surprises when markets shift (which they always do). The problem? Traditional forecasting is slow, manual, and often… wrong. That’s where AI and automation are increasing accuracy while reducing manual workloads. In this guide, we’ll break down the building blocks of effective treasury cash flow forecasting, explore practical ways to optimize your process, and show you how AI can turn forecasting from a reactive task into a strategic advantage. The Critical Role of Cash Forecasting in Treasury Management Cash forecasting in treasury management is more than just an operational task – it’s a strategic necessity. Here’s why: Liquidity Management: Companies must ensure they have enough cash to meet obligations without holding excess reserves that could be better invested elsewhere. A company that sits on excess cash is leaving money on the table. Finance teams have the opportunity to be a revenue generator by taking advantage of excess cash and investment opportunities. Risk Mitigation: Cash management is a balancing act. Yes, maximizing investment returns is a critical function, but by overinvesting and not maintaining enough liquidity, companies leave themselves vulnerable to unanticipated changes in the market. Unexpected cash shortfalls can result in missed payments or costly emergency borrowing. Accurate forecasting can prevent these financial shocks. Strategic Planning: Businesses rely on forecasts to make investment, financing, and operational decisions. For example, retail businesses with high seasonality need accurate forecasts to help prepare for low revenue periods and maintain the right level of inventory for high revenue periods. Without a forecast, these businesses are flying blind and risk costly mistakes (like the cash shortfalls mentioned above). Compliance & Regulatory Requirements: Many industries require detailed cash forecasting reports to meet regulatory standards. For example, banks must complete detailed forecasts in order to maintain mandated liquidity levels. For regulated industries with liquidity requirements, forecasting is even more vital. Without a robust treasury cash flow forecasting process, organizations risk inefficiencies, increased borrowing costs, and potential financial distress. Whereas a strong cash forecasting process can help companies increase revenue from investments, weather market variations stronger than competitors, and bring the financial stress level down for the entire organization. That last one shouldn’t be overlooked. Key Components of Accurate Cash Forecasting You’ve probably heard it before: cash forecasting in treasury management is part science, part art. But no matter how you slice it, there are some core steps that make or break your forecast. Here’s what needs to be in place for a forecasting process that’s both reliable and repeatable: 1. Start with Clean Historical Data Before you can predict the future, you need a solid handle on the past. Pull actual historical cash flow data – at minimum, a year’s worth – and make sure it’s categorized correctly. This gives you a baseline to identify trends, seasonality, and outliers. 2. Pull Future-Dated Transactions from Your ERP The best forecasts combine historicals with what’s coming down the pipeline. That means syncing your ERP or accounting system to include scheduled inflows and outflows: think customer invoices, vendor bills, payroll runs, loan payments. This turns your forecast from backward-looking to forward-facing. 3. Set Categories That Match How You Manage Cash Your categories should reflect how your business thinks about cash. Operating, investing, financing, but also more specific buckets like “enterprise customer payments” or “cloud infrastructure costs.” Clear categories help both in building the forecast and explaining variances later. 4. Define the Forecasting Period Cash forecasting methods vary depending on how far out you’re looking. Regardless of your time horizon, make sure your period aligns with your decision-making cycles. 5. Choose the Right Cash Forecasting Method There’s no one-size-fits-all approach. Most treasury teams use a mix: The key is picking the method that aligns with your needs, and being consistent in applying it. 6. Run Variance Analyses – And Learn From Them Forecasting isn’t a set-it-and-forget-it exercise. Once actuals come in, compare them to your forecast. Where were you off? Were there surprises in receivables timing or unexpected expenses? Regular variance analysis helps refine your process and improves accuracy over time. 7. Adjust and Iterate Forecasting is a living process. As new data becomes available – updated invoice schedules, shifting customer payment behavior, changes in burn rate – fold it into your model. AI and automation can help, but even basic manual adjustments go a long way. How to Optimize Cash Forecasting in Treasury Management Accurate cash flow forecasting is critical for maintaining financial stability, optimizing working capital, and making informed strategic decisions. To improve forecast accuracy and avoid unnecessary financial risks, follow these four best practices: 1. Automate Data Collection Manually gathering cash flow data from multiple accounts and systems is time-consuming and error-prone. Treasury teams should leverage automation tools to pull real-time cash flow data from multiple sources like banks, ERPs, and payment platforms to improve accuracy. 2. Categorize Inflows and Outflows Strategically Break down your cash flow drivers to gain deeper insights and improve forecast precision. Closely track key inflows (customer collections, financing, asset sales) and outflows (supplier payments, payroll, capital expenditures). You can adjust your granularity based on business needs – detailed segmentation isn’t always necessary. 3. Enhance Collaboration Across Departments Finance and treasury teams should work closely with departments that influence cash flow, such as sales, procurement, and FP&A, to ensure all relevant data points are included in forecasts. Sync forecasts with financial reporting cycles to ensure they incorporate the latest actuals. And communicate findings effectively – tailor insights for different audiences, from CFOs to department heads. 4. Leverage AI and Predictive Analytics AI-powered forecasting tools enhance accuracy by analyzing historical patterns and external market trends in real time. By integrating your past performance, current…
When playing it safe is the biggest risk: GoCardless’ CFO tells all
This article is a contribution from one of our content partners, Bound Most CFOs learn about cash management gradually. But Catherine Birkett had the dubious privilege of being thrown in at the deep end in her first CFO role – managing a €10m monthly burn rate with barely any revenue. Here, she explains why a crisis isn’t to be feared but embraced as a chance for bold, calculated moves – and highlights how her journey from telecoms to fintech has taught her that sometimes the biggest threat is avoiding risk altogether. A crash course in cash burn Now steering the finance function at GoCardless, Catherine’s CFO journey began in the high-stakes world of telecom with Interoute, a company she candidly describes as “nearly bankrupt” when she joined. “We were burning €10 million monthly post-dot-com crash,” she recalls. “Every Monday, I asked myself the same question: ‘Can we make payroll this week?’” It was undeniably a tough gig, especially for someone stepping into the CFO role for the first time. But known for her pragmatic approach (she is a proud northerner, after all!), Catherine tackled the challenge by creating a “three-horizon framework” that balanced short-term survival with long-term growth. “I asked myself three questions: what has to happen today to keep us afloat? What needs to happen this month to stabilise? And what should happen this quarter to build for the future?” That framework, born out of necessity, has become a guiding principle throughout her career, helping to keep immediate financial needs in check without sacrificing long-term strategy. “When you’re staring down the barrel, you can’t afford to overthink,” she advises. “Sometimes, survival means moving faster, trusting your gut, and accepting that waiting for perfect information is a luxury you don’t have. You just have to get on with it. But having that daily, monthly, and quarterly plan can at least provide an anchor in a sea of chaos.” To help prevent these kinds of situations in the first place, Catherine advocates focusing on building resilience. “Cash is king, especially when the world is so unpredictable. I’m always thinking about cash reserves,” she says. “Having a cash buffer isn’t just about security, it’s about freedom. As CFOs, it lets us make strategic decisions without the desperation that can come from being cash-strapped.” Risk can be your best friend (sometimes) Despite her love for financial security, Catherine doesn’t buy into the conventional wisdom that playing it safe is always best, certainly when it comes to strategic decision-making. For example, there were often times at GoCardless when the need to invest to grow the business had to be considered alongside cost control. This was particularly evident during Covid when, together with her CEO, she persuaded the board not to make such severe cutbacks despite the uncertain macro-economic environment – to ensure the business could continue to grow. A move which proved successful as, after an initial drop in revenues, the business continued to flourish. For Catherine, risk management isn’t always about dodging uncertainty – although of course there is a large amount of that too – but also about knowing when to bet on it. “I think there’s a myth in finance that caution equals safety. But in a high-growth market, standing still can be the riskiest move of all.” FX strategy: certainty over speculation Although she advocates for taking calculated risks in some areas, FX is not one of them. Her approach at GoCardless is to focus on stability over speculation. “You’re not a forex trader. You’re a CFO. Certainty is what matters,” she says. “If you’ve budgeted at a rate, lock it in and move on. Don’t gamble.” One formative experience stands out for her. In 2016, just months before Brexit, Interoute acquired a sterling-based business, only to see the currency plummet. “Overnight, the revenue value in sterling dropped. Thankfully, we were hedged, so the bottom line wasn’t impacted, but explaining that shift to stakeholders was a nightmare,” she recalls. “You can’t predict everything, but you can prepare for the worst. Locking in certainty always outweighs speculative gains.” Not hiring clones Elsewhere, Catherine likes to take a deliberate approach when it comes to building her finance team, with her key consideration being that their strengths fill her weaknesses, and not opting for people just like herself. “Early in my career, I thought I’d made the perfect hire – someone who mirrored my approach exactly. But it turned out to be a complete disaster,” she laughs. “Two people with identical strengths mean identical blind spots.” Since then, she’s flipped her hiring strategy entirely. Today, her team at GoCardless is intentionally diverse in both thought and approach. “My current financial controller and I have completely different styles. They catch what I miss, and I catch what they might overlook. It’s a balance,” she says. By hiring people who think differently, Catherine ensures her team brings fresh perspectives, fewer blind spots, and a stronger ability to handle complex challenges. “You don’t want clones – you want different opinions, and people who are prepared to question. That curiosity creates checks and balances.” The human element of the CFO role is becoming more and more critical, believes Catherine. Aside from good hiring strategies, soft skills are increasingly in demand – especially the art of communication with the board. To Catherine, board meetings aren’t for show, they’re for setting direction. Recently, she faced a boardroom showdown where competing priorities were stirring up tension. Instead of pushing a single recommendation, she presented a “decision map” that laid out multiple pathways. “Rather than focusing solely on numbers, we mapped out three paths: conservative, balanced, and aggressive growth. But we didn’t just show figures. We demonstrated how each choice would affect everything: product roadmap, talent acquisition, market positioning, and customer experience,” she says. This approach shifted the discussion to the bigger picture, enabling the board to focus on what mattered most to the business. “It’s not about knowing every answer,” she explains. “It’s about being able to shift the…
Treasury Contrarian View: Inflation Hedging — Should Treasury Even Try?
Inflation is back in the headlines—and so is the pressure on treasury teams to protect company value. But here’s the provocative question: Should corporate treasury even try to hedge inflation? Or is it a costly distraction that’s outside treasury’s control and best left to pricing, procurement, and operations? The Case for Treasury Getting Involved in Inflation Hedging The Case Against Treasury Owning Inflation Hedging A Coordinated Approach Rather than owning inflation hedging outright, treasury teams can: Let’s Discuss We’ll feature perspectives from treasurers and risk experts—join the conversation and share your thoughts! COMMENTS Johann Isturiz Acev, Treasury Masterminds Board Member, comments: A shared model between Treasury and other internal areas look like most convenient. We see treasury sharing historical data and market products and procurement/commercial team finding a common sense to protect margin and avoid P&L swings. So, a case by case and country/market analysis have to be done in each transaction to measure the risk and impacts. Patrick Kunz, Treasury Masterminds Founder and Board Member, comments: The article makes inflation sound like a bad thing. Which it CAN be, rising costs or indirect adverse effects on exchange rates or interest rates. But it can also be good. IF you can increase your prices with inflation the companies revenue will increase, even if costs also increase as revenue should be the higher compared to cost so inflation makes this go up faster. When debt stays the same your relative debt position will decrease, without much effort. So much for a perfect world where you can 1on1 increase your prices with inflation, without unhappy clients. Can treasurers directly hedge inflation ? It is possible with slightly more complex derivatives. Will they be effective ? never 100% as the treasurer will never fully know its exact exposure on inflation. So do nothing? No, we can (and should) hedge the inflation proxies: interest rates and FX. We can much better determine the exposure on IR and FX. We therefore can decide on a risk appetite and how much to hedge (or not to hedge). I also like the inflation protection clauses, both on the procurement and the sales side. These can protect your COGS or your sales by limiting the inflation impact. Limiting, never fully mitigating. As with hedging where one party wins the other loses in these clauses. Fairness rules. But for these clauses treasury would not be in the lead but can act as advisor to the procurement and sales teams, if they are willing to listen. By all means challenge me on this views, would love a discussion on this topic. 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.