52 Finance Monthly. Business & Economy Refocus on the fundamentals. Particularly within any organization that has not yet felt the effects of such regular macro disruption, it may be tempting to adopt an “if it ain’t broke, don’t fix it” mindset. But that risks ignoring the realities of the past three years. Instead, it’s time to proactively and holistically revisit and optimize treasury fundamentals, including a thorough understanding of your cash positions, your forecasting, and other core treasury activities. Making an effort (now) to do 1 2 this creates the foundation for fostering organization-wide stability, but it also empowers the business to more rapidly pursue new strategic opportunities or competitive advantages. To not do this likely means you’re not maximizing your working capital and operating from a position of strength. The rising interest rate environment is a great example of the need for agility. There’s regular movement into and out of various asset classes as a means of chasing and optimizing yield, yet many organizations aren’t positioning themselves to take advantage. They can’t react quickly enough or do things like real-time payment transfers, which subsequently means they’re underutilizing their valuable capital. Go beyond the basics. In volatile capital markets and macroeconomic conditions, the basics—an ERP system, your bank portal, etc.—are no longer sufficient on their own. You need a comprehensive, single source of truth about your cash positions. Otherwise, depending on the specifics of your FI structure, you’re probably missing out on interest rate arbitrage opportunities. And if you’re a multinational business, your FX strategies are probably not working optimally. The pandemic, in particular, underscored the need for systems that codify data and knowledge, so that when employees leave, there is minimal “brain drain” effect. This is all the more crucial because volatility isn’t just a matter of macroeconomics. Big-picture conditions constantly intersect with a company’s microeconomics, and when the latter isn’t well understood by the people who need to know it best – the treasury team – then missed opportunities and major problems are more likely to happen. Without actionable, visible knowledge, treasury teams can’t make decisions in real time. Recent bank failures are a stark reminder of the need to understand how
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