Every coin has its flip side. And when it comes to the finance and treasury functions of their organizations, businesses are increasingly calling both ‘heads’ and ‘tails’ to navigate today’s operational uncertainties.
This shift toward a greater convergence and potential synergies between the roles of finance and treasury is not merely a response to economic pressures or regulatory changes. Instead, it reflects a deeper strategic alignment aimed at enhancing financial and business success on both micro and macro levels by unlocking the digital transformation of previously siloed functions.
While both treasury and finance departments have historically shared a focus on financial management, their perspectives and approaches have traditionally been distinct.
Finance teams often operate with a long-term strategic view on their company’s overall financial health, including budgeting, forecasting and financial reporting; while treasury teams focus on cash management, liquidity planning and risk management. However, as the business environment grows more complex and interconnected, these roles are becoming increasingly intertwined.
According to the latest PYMNTS Intelligence, a full 77% of treasurers believe that at least one department in their organization would benefit from closer collaboration with them
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Capturing Strategic Synergies Between Finance and Treasury
As companies prioritize growth and value creation, strategic capital allocation becomes paramount. Finance and treasury teams are increasingly collaborating so that firms are better able to align capital allocation with corporate strategy, balancing investments in growth initiatives with the need for liquidity and financial stability.
“Cash flow can be a blind spot for the finance team,” Noam Mills, CEO at Panax, told PYMNTS, explaining that traditional cash flow management can often be reliant on manual processes and reactive measures.
By sharing insights and data, finance and treasury teams can create more accurate and comprehensive financial plans, enhancing financial planning and analysis and ultimately boosting the company’s ability to anticipate cash flow needs, manage working capital and optimize investment strategies.
“CFOs need to understand the business, not just model it and visualize it … but work with teams as a partner not just a bookkeeper keeping things on track,” Provi CFO Kevin Price told PYMNTS. “There is a lot more financial partnership and analytical leadership that the finance department is providing now.”
With a more integrated approach, companies can better identify, assess and mitigate financial risks. For example, coordinated efforts in managing foreign exchange exposure, interest rate risks and counterparty risks lead to more robust risk management frameworks.
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The global…
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