Treasury: a cash position known every morning, a forecast kept up to date without rebuilding the file.
Treasury makes sure the company can pay at every due date, and that available cash is put to the best use. Every day it consolidates balances from several banks, forecasts receipts and payments, secures payments and monitors financing. A large share of its time goes into collecting and classifying bank data: that is the share automation frees up for anticipation.
The role
Between the banks, accounting, operational teams and executive management.
The treasurer keeps the cash position, builds the forecast with accounts receivable, accounts payable and management control, and approves payments before they are sent to the banks. They negotiate and monitor financing, manage currency risk and surplus cash, and alert management as soon as pressure on cash appears. In a mid-sized company, the function often rests on a very small team, sometimes reporting to the chief accountant.
Day to day
A typical day.
- MorningRetrieve statements from every bank and establish the cash position of each entity.
- MorningBalance the accounts: balancing transfers, sweeps to the central account, covering overdrafts.
- MiddayApprove the payment runs prepared by accounts payable and one-off transfers.
- AfternoonUpdate the forecast with the large known items: salaries, taxes, loan repayments, expected receipts.
- Every weekCompare the forecast with actuals and explain the variances to the finance department.
- Month-endMonitor covenants, credit lines, currency positions and bank charges, then prepare the treasury report.
The objectives
What the role is measured on.
- Reliability of the cash forecast
- Variances between forecast and actual
- Available cash and undrawn credit lines
- Compliance with bank covenants
- Cost of bank charges and short-term financing
- Payment incidents and fraud attempts
Indicators are named, never quantified: levels depend on each company, and the diagnostic measures them.
Day to day
The problems that come up most.
A position rebuilt every morning
Statements are downloaded bank by bank, copied into a spreadsheet and reworked before a consolidated view is available.
A forecast kept in a fragile file
The forecast lives in a workbook fed by hand, whose assumptions are known only to its author.
Data from other departments arriving late
Customer due dates, supplier payment runs, capital expenditure, payroll: information arrives by e-mail, when someone thinks of sending it.
Poorly classified bank flows
Bank descriptions do not always say what a flow is; classification into treasury categories is done by hand, with errors.
Payments exposed to fraud
Fake transfers, executive impersonation, changed bank details: the pressure on treasury is high, especially when procedures rely on individual vigilance.
Financing tracked by hand
Loan schedules, covenants, committed lines, bank terms: each contract has its own file, and a due date can be missed.
By sector
One role, several realities.
- Fashion and luxury
Several entities and countries, boutique and e-commerce receipts in foreign currencies, payments to workshops and manufacturers abroad, and seasonality driven by the collections.
- Retail
Daily store receipts by card and cash, payouts from payment service providers, rent and seasonal purchases that draw down cash before the sales.
- Cosmetics and beauty
International purchases of components and packaging, sales to distributors and travel retail in foreign currencies, launches that tie up stock and cash before the first sales.
- B2B distribution and wholesale
High working capital requirement across stock, customer credit and supplier terms; factoring and short-term credit lines are often at the heart of treasury.
- Construction and property
Cash tracked project by project, with deposits, progress billing, retentions and bank guarantees; on the property management side, separate accounts for each co-ownership.
- Industry
Purchases of indexed raw materials, industrial investment financed by loans, exports with currency risk and a long manufacturing cycle between payment and receipt.
- Pharma and healthcare
Long industrial investment and development projects, receipts from public buyers and wholesalers, and royalty and licence flows between entities and countries.
What changes
Automate the task, keep the judgement.
What gets automated
- Daily retrieval of statements from every bank and the consolidated cash position by entity, with no re-keying.
- Classification of bank flows into treasury categories, by an AI agent that reads descriptions and references and learns from corrections.
- A forecast fed automatically by customer and supplier due dates from the ERP, payroll, loans and known commitments.
- Comparison of forecast and actual, with variances explained by category and by entity.
- Tracking of financing, covenants, currency positions and bank charges, with alerts before each due date.
What stays human
- Approval and signature of payments, according to the bank signing powers in force.
- Decisions on financing, investment of surplus cash, currency hedging and payment arbitration when cash is tight.
- The relationship with the banks and the negotiation of terms.
Use cases
How to automate, case by case.
Each case starts from a question leadership teams ask. The starting point, what gets automated, the tools involved, and what stays in the teams’ hands.
How to automate cash forecasting?
- Today
- Every week the treasurer updates a workbook: copying customer and supplier due dates extracted from the ERP, adding payroll, taxes, loan repayments and information received by e-mail. The file is rebuilt more than it is updated, and its assumptions are hard to review.
- What gets automated
- The forecast is fed automatically by its sources: customer invoices with a collection date estimated from each customer’s history, supplier invoices and planned payment runs, payroll, loan and VAT schedules, capital expenditure commitments. The treasurer only adds the flows the systems do not know about. Each version is kept, with what changed since the previous one.
- What stays human
- The treasurer sets the assumptions, adjusts the forecast and presents it to the finance department.
- treasury management tool
- ERP
- payroll software
- management reporting tool (BI)
How to automate the daily cash position across several banks?
- Today
- Every morning, the treasurer logs in to each bank’s website, notes the previous day’s balances and transactions in a spreadsheet, then calculates the position by entity and by currency. Same-day value transactions and upcoming transfers are not visible at a glance.
- What gets automated
- The previous day’s statements and the day’s transactions arrive automatically through bank communication channels. A tool calculates the position by entity, by bank and by currency, includes payments already approved and expected receipts, and proposes the balancing transfers required.
- What stays human
- The treasurer approves the balancing transfers and decides on investments or drawdowns.
- treasury management tool
- bank communication
- ERP
How to automate cash pooling and the calculation of interest under the cash management agreement?
- Today
- The group centralises its subsidiaries’ cash in a central account, through automatic sweeps or manual transfers. Intercompany current accounts and the interest provided for in the cash management agreement are calculated in a spreadsheet, then recharged at the end of the period.
- What gets automated
- Cash pooling movements are picked up automatically from bank statements and split by subsidiary. A tool keeps intercompany current accounts day by day, calculates interest according to the agreement’s rates and rules, and prepares the entries and interest invoices for each entity.
- What stays human
- The finance department sets the agreement’s rates and rules, and approves the interest recharged.
- treasury management tool
- bank communication
- ERP or accounting software
How to secure transfers and automate checks on bank signing powers?
- Today
- Transfer files are prepared in the ERP, then uploaded to the banks’ websites and signed by authorised people. The list of signatories, their limits and the dual signatures required are kept in separate documents, and an urgent transfer can bypass the procedure.
- What gets automated
- Payments go through a single channel: preparation in the ERP, automatic checks (known beneficiary, bank details not recently changed, unusual amount), then signature according to the bank signing powers matrix recorded in the tool. An AI agent flags atypical transfer requests, such as an urgency claimed by an executive by e-mail. Files go to the banks with no manual handling.
- What stays human
- Authorised signatories approve each payment, and any unusual transfer is verified by a call-back.
- treasury management tool
- ERP
- bank communication
- access rights management tool
How to automate currency risk monitoring?
- Today
- Purchases in foreign currencies, export sales, foreign subsidiaries: exposures are scattered across the ERP, orders and subsidiaries’ forecasts. The treasurer lists them in a spreadsheet to decide on hedges, and hedging contracts are tracked separately.
- What gets automated
- A tool automatically lists exposures by currency and maturity from orders, open invoices and forecasts. It sets them against the hedges in place, shows the net exposure and gives notice before each contract matures. Reference rates are loaded daily to value positions.
- What stays human
- The treasurer proposes the hedging policy, and the finance department decides which transactions to enter into.
- treasury management tool
- ERP
- management reporting tool (BI)
How to automate the tracking of loans and bank covenants?
- Today
- Each loan has its repayment schedule, each contract its covenants: debt ratios, interest cover, equity. Schedules are entered in a spreadsheet, and ratios are calculated when they have to be reported to the banks, when it is too late to act.
- What gets automated
- Financing contracts are described once: schedule, rate, security, covenants and their precise definitions. A tool calculates upcoming repayments, feeds them into the forecast and projects the ratios at each close and on the budget. An alert goes out as soon as a projected ratio approaches the contract threshold.
- What stays human
- The CFO opens discussions with the banks when a covenant is at risk.
- treasury management tool
- accounting software
- budget planning tool
- management reporting tool (BI)
How to automate the assignment of receivables to factoring?
- Today
- Every week, the accountant selects the invoices eligible under the factoring contract, prepares the assignment in the factor’s format, then reconciles the funding received and customers’ payments. Disputed or out-of-scope invoices are set aside by hand.
- What gets automated
- A tool connected to the ERP selects eligible invoices according to the contract rules (approved customers, limits, invoices without dispute), prepares and sends the assignment, then automatically reconciles funding, fees and receipts collected by the factor. Available funding is included in the forecast.
- What stays human
- The treasurer decides how much to assign, and accounts receivable approves the list of invoices assigned.
- ERP
- factor’s platform
- treasury management tool
- reconciliation tool
How to automate checks on bank charges and bank terms?
- Today
- Transaction fees, account maintenance fees, international transfer charges, commitment fees: charges appear on statements under varied descriptions. Nobody checks that they match the terms negotiated with each bank.
- What gets automated
- Negotiated terms are entered by bank and by type of charge. A tool extracts charges from the statements, classifies them by nature, compares them with the terms and with transaction volumes, and flags discrepancies. A summary by bank prepares the annual review of terms.
- What stays human
- The treasurer claims back undue charges and renegotiates terms with the banks.
- treasury management tool
- bank communication
- management reporting tool (BI)
How to automate the analysis of variances between forecast and actual cash?
- Today
- At the end of the week or month, the treasurer compares the forecast with actual movements and looks for variances: a customer who paid late, a payment run brought forward, a forgotten receipt. The work is done line by line, and recurring causes go unnoticed.
- What gets automated
- Each actual flow is classified in the same category as the forecast and matched with the planned line when there is one. A tool calculates variances by category, by entity and by cause (timing, amount, unplanned flow), and an AI agent drafts a first explanation. Recurring causes are used to correct the assumptions of the next forecast.
- What stays human
- The treasurer approves the explanation and decides which assumptions to correct.
- treasury management tool
- management reporting tool (BI)
- AI analysis agent
How to automate the classification of bank flows into treasury categories?
- Today
- To track cash by nature, customer receipts, suppliers, salaries, taxes, financing, each bank transaction has to be classified. Descriptions are often truncated or coded, and classification is done by hand or by fragile rules that break whenever a description changes.
- What gets automated
- An AI agent classifies each transaction from the description, the counterparty, the amount and the related accounting entries when they exist. Explicit rules keep priority for known flows, and the treasurer’s corrections are remembered. Transactions with an uncertain classification are presented separately.
- What stays human
- The treasurer approves uncertain classifications and keeps the list of categories up to date.
- treasury management tool
- AI classification agent
- accounting software
Questions from the teams
What teams look to improve.
- What horizon and level of detail for a cash forecast?
- It is common to keep two views: a short-term forecast, weekly, based on actual due dates, and a medium-term forecast, monthly, based on the budget and its assumptions. Both share the same flow categories, so that one can move from one to the other. The exact horizon and granularity are decided with the finance department, depending on seasonality and how tight cash is.
- Is treasury management software necessary, or is a spreadsheet enough?
- A spreadsheet is enough as long as there are few banks, few entities and the forecast stays simple. When statements multiply, payments need to be secured and several people contribute, a tool connected to the banks and the ERP becomes more reliable. The diagnostic shows the point at which the file costs more than it delivers.
- How to retrieve statements from several banks automatically?
- Banks offer secure communication channels, banking protocols or programming interfaces, that send statements every day in a standard format. A treasury tool or the accounting software receives and loads them automatically. Set-up is done bank by bank, with contracts and authorisations signed by the treasurer.
- How to get operational teams to contribute to the cash forecast?
- Ask them only for what the systems do not know: upcoming capital expenditure, large orders, project delays, exceptional events. A short form, sent on a fixed date and chased automatically, collects this information in the same categories as the forecast. The treasurer remains in charge of the assumptions retained.
- How to present treasury to the executive committee?
- A few stable views: current position and available lines, forecast over the chosen horizon, the month’s variances and their causes, upcoming financing maturities. A management dashboard keeps them up to date automatically, with a first commentary prepared by an AI agent. The message and recommendations remain those of the treasurer and the CFO.
- How to anticipate pressure on cash?
- A reliable forecast over a sufficient horizon, compared with actuals every week, shows the upcoming low point and its sensitivity to the main assumptions. Alerts flag when that low point approaches the thresholds set by management. The measures, postponing an investment, drawing on a line, speeding up collections, remain decisions for the finance department.
- How to integrate the cash of foreign subsidiaries?
- Retrieve statements from local banks through the same channels as head office, and classify their flows into the group’s common categories. Each subsidiary’s forecast is consolidated in the group currency, with reference rates loaded automatically. Local constraints, exchange controls, taxation of intercompany flows, are validated with advisers in the country.
- Can AI forecast cash?
- It can help on two points: classifying bank flows into the right categories, and estimating the actual collection date of each invoice from the customer’s past behaviour. It can also spot recurring patterns the file did not see. The underlying assumptions, activity, investment, financing, and the resulting decision remain human.
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