You know the scene in every other rom-com ever made where the class/office nerd removes their glasses, shakes their hair in slow-mo, and they’re suddenly attractive?
B2B Treasury is having a moment like that.
Historically a kind of high-level fiscal admin function, Treasury now has the opportunity to be creatively strategic, helping to navigate market volatility and hone a competitive edge. Given the unsettled economy, managing cash flow, maintaining liquidity, and preserving supplier relationships are priorities. Treasury is influencing this, and a lot more.
A strategic elevation of the function requires a shift in how organizations approach payment management, cash visibility, and security. By championing payments within the organization, for example, Treasury departments can substantially impact a company's financial health and resilience during difficult times.
"Treasury has always operated somewhat tactically, but it can be used as a strategic lever for managing liquidity, and risk, and to optimize cash," according to Bottomline Vice President for Treasury, Leo Gil. That perspective becomes even more critical during off-kilter market cycles when optimizing cash flow makes the difference between thriving and surviving.
Treasury as a Champion of B2B Payments
When Treasury takes ownership of payment flows, interesting things start to happen. For example, companies gain the liquidity insights needed to make strategic decisions about when and how to pay.
This approach moves beyond simply processing transactions to actively managing them for maximum financial benefit.
"Treasury can drive intelligence into payment management that benefits the financial health of the company," Gil said. "Treasury can suggest delaying payments to preserve cash during uncertain times, or propose early-payment discounts for customers to cover liquidity shortfalls." It’s not about Treasury owning every payment, he added, but rather, breaking down finance silos and embedding Treasury as superintendent of the process.
When Treasury is integrated into upstream planning and downstream execution, payment decisions become more coordinated, and aligned with the company’s overall liquidity and risk posture. As expected, AI is now playing more of a role in this process.
"By leveraging artificial intelligence with cash forecasting, treasury can anticipate cash needs and help optimize payment timings accordingly," Gil said. This forward-looking approach allows companies to be proactive rather than reactive with their payments.
Perhaps most importantly, tighter payment management improves valuable business relationships. "Consistent payment practices build loyalty and trust with suppliers, which can be invaluable during supply chain disruptions," Gil said. "Critical suppliers are more likely to prioritize your orders during constraints if they know they can count on timely payments."
Achieving Real-Time Cash Visibility
Despite technological advances, many organizations are struggling with true cash visibility. This challenge becomes particularly acute in times of market volatility, when having accurate, up-to-date information is essential for sound decision-making.
"Many companies think they've solved cash visibility, but they're still relying on slow, manual processes and prior-day data," Gil said. "True cash visibility is real-time and forward-looking, not backward-looking." The consequences of poor visibility can be severe, especially in rapidly changing markets.
Without it, companies risk missing investment opportunities, facing liquidity shortages, or making decisions with outdated information.
Modern payment service providers (PSPs) address this by automating data collection and consolidation. They automate the retrieval of cash information from multiple systems, providing a consolidated view of cash positions across banks and accounts.
This eliminates manual processes that are prone to errors and delays. "With automated cash management, companies can update their cash position in real-time as payments are made and received, enabling more informed decision-making," Gil said.
The benefits extend beyond operational efficiency to strategy. Real-time visibility allows Treasury to respond quickly to shifting market conditions, optimize cash utilization, and make more informed decisions about investments, borrowing, and payment timing.
Securing Payment Workflows for an Automated Future
As payment processes become more automated and faster, security concerns take on greater importance. "The challenge with automation and faster payments is maintaining robust security while enabling efficiency," Gil said. "Treasury needs to implement strong controls without creating bottlenecks."
Control of authentication and access is critical, ensuring that only authorized individuals can initiate or approve payments. "Real-time validation of payment details, including bank account information and beneficiary verification, helps prevent fraud and errors," Gil said.
Regulatory compliance adds another layer of complexity. "Companies must screen payments against sanction lists to ensure compliance with regulations and avoid penalties," he noted. Screening becomes more difficult because sanctions change frequently in response to global events.” Artificial intelligence is useful here.
"AI-driven anomaly detection can identify unusual payment patterns that might indicate fraud, even as processes change," according to Gil. This kind of proactive approach helps companies stay ahead of potential security breaches. Payment Service Providers (PSPs) like Bottomline offer solutions that keep things secure while preserving effectiveness.
"We provide a user-friendly interface that simplifies cash management while incorporating robust security measures," Gil said. "This allows companies to automate payments securely without requiring extensive technical expertise."
By elevating Treasury's role in payment management, achieving real-time cash visibility, and implementing robust security measures, companies can better navigate unfriendly market conditions. This strategic approach not only improves financial performance but also reinforces supplier relationships and competitive positioning when it’s needed most.
As uncertainty persists, the strategic engagement of Treasury in payment operations will become increasingly vital to organizational resilience and success. Companies that position their Treasury departments as strategic payment champions will be best equipped to weather market volatility and emerge stronger when it’s over.