Treasury Management for Growing Businesses: Beyond Basic Cash Flow

Cash is the lifeblood of business. You can survive losses. You can survive slow growth. You cannot survive running out of cash.

Yet most growing businesses manage cash reactively. They check the bank balance, estimate what's coming, and hope it works out. Sometimes it does. Sometimes payroll bounces.

Treasury management is the discipline of managing cash proactively. It means knowing your position every day, forecasting what's coming, optimizing your banking structure, and ensuring you always have liquidity where you need it.

What Is Treasury Management?

Treasury management encompasses all activities related to managing your company's cash and financial assets.

Core Treasury Functions

• Cash positioning: Knowing your exact cash balance across all accounts, every day
• Cash forecasting: Projecting cash inflows and outflows over the near term (typically 13 weeks)
• Liquidity management: Ensuring you have access to cash when you need it
• Banking relationships: Managing bank accounts, credit facilities, and banking partners
• Payment operations: Executing and controlling outgoing payments
• Risk management: Protecting against liquidity, operational, and FX risks

Treasury vs. Accounting

Treasury and accounting are related but different:

Daily Cash Management

The foundation of treasury is knowing your cash position every day.

The Daily Cash Position

Every morning, you should know:

• Opening balance: Cash in all accounts as of today
• Expected inflows: Deposits, incoming wires, ACH receipts expected today
• Expected outflows: Payments, wires, ACH debits expected today
• Projected closing balance: Where you'll end the day

For detailed guidance, see Daily Cash Positioning: Know Your Cash Every Morning.

The 13-Week Cash Forecast

Daily positioning is tactical. The 13-week cash forecast is strategic. It shows:

• Weekly cash inflows by source (collections, other receipts)
• Weekly cash outflows by type (payroll, AP, debt service, taxes)
• Weekly ending cash balance
• Minimum cash thresholds and buffer

This forecast lets you see cash crunches coming weeks in advance—time to act rather than react. For more on cash forecasting, see our Cash Flow & Working Capital Management guide.

Banking Relationships

Your bank isn't just where you keep money. It's a strategic partner that enables your operations.

Account Structure

Most growing businesses need multiple accounts:

• Operating account: Primary account for day-to-day receipts and payments
• Payroll account: Dedicated account for payroll (limits fraud exposure)
• Reserve/savings: Account for cash reserves, earning interest
• Collections account: Where customer payments land (if different from operating)

Credit Facilities

Working capital lines of credit provide liquidity buffer:

• Revolving credit line: Draw when needed, repay when flush
• Asset-based lending: Borrowing against receivables or inventory
• Term debt: Fixed borrowing for longer-term needs

For detailed guidance, see Banking Relationships: Structure and Optimization for Growing Companies.

When to Add Banks

Consider a second banking relationship when:

• Deposits exceed FDIC limits ($250K per depositor per bank)
• You need backup in case of bank issues
• Different banks offer better products for different needs
• You're diversifying concentration risk

Payment Operations

How you pay vendors affects cash timing, cost, and risk.

Payment Methods

• ACH: Standard for most vendor payments. 1-3 day settlement, low cost ($0-$1/transaction)
• Wire transfer: Same-day settlement for time-sensitive or large payments. Higher cost ($15-$35/wire)
• Check: Legacy method, still needed for some vendors. Slow, fraud risk, administrative burden
• Virtual card: Pay vendors by card for cashback rewards. Works for vendors who accept card

Payment Timing

Strategic payment timing preserves cash:

• Pay on due date, not before (unless early pay discount exceeds your cost of capital)
• Consolidate payment runs (weekly instead of daily) for better control
• Time large payments for days when you expect collections
• Negotiate extended terms with key vendors where possible

For detailed guidance, see Payment Operations: Managing Outgoing Cash Efficiently.

Treasury Technology

Technology enables better treasury management without adding staff.

Essential Tools

• Bank connectivity: Automated daily balance feeds from your banks
• Cash positioning worksheet: Simple spreadsheet consolidating all accounts
• 13-week cash forecast: Rolling forecast updated weekly
• Payment automation: Bill.com or similar for AP workflow and payments

Advanced Tools

For more complex operations:

• Treasury management system (TMS): Dedicated software for cash visibility, forecasting, and payments
• Bank portal aggregation: Single view across multiple banks
• FX management: Tools for hedging and executing foreign exchange

For detailed guidance, see Treasury Technology: Tools for Cash Visibility and Control.

Multi-Entity Treasury

Managing cash across multiple legal entities adds complexity.

Challenges

• Cash trapped in one entity while another entity needs it
• Intercompany transactions requiring documentation
• Consolidated reporting across entities
• Tax implications of cash movements

Solutions

• Central treasury model: One entity manages cash for the group
• Intercompany loans: Formal documentation for cash movements between entities
• Cash pooling: Consolidating cash for better management
• Consolidated reporting: Single view of cash across all entities

For detailed guidance, see Cash Pooling and Intercompany Transactions.

International Treasury

Operating internationally introduces currency and cross-border complexity.

Key Considerations

• Multi-currency accounts: Hold local currency to avoid constant conversion
• FX exposure: Manage gains/losses from currency fluctuation
• Cross-border payments: International wires, timing, and fees
• Repatriation: Getting cash back to the US when needed

For detailed guidance, see International Treasury: Managing Cash Across Borders.

When to Formalize Treasury

Not every company needs dedicated treasury. Here's when to formalize:

Signs You Need Treasury Focus

• Cash surprises: You've been surprised by low balances or near-misses
• Time consumption: Managing cash is consuming significant management time
• Multiple accounts: You have 5+ bank accounts and lose track
• Credit usage: You have a line of credit you draw on regularly
• Seasonality: Significant cash flow variation through the year
• Growth: Rapid growth creating cash timing challenges

In-House vs. Outsourced

• Under $25M revenue: Treasury typically handled by CFO or outsourced finance team. Part-time focus.
• $25M-$100M revenue: May need more dedicated attention. Often outsourced or part of CFO role.
• Over $100M revenue: Likely needs dedicated treasury staff, especially with complexity (international, M&A, significant debt).

Frequently Asked Questions