Unleashing Your Cash Potential: Discover How Treasury and Procurement Are Revolutionizing Liquidity Management

Nikolai Diekert
Nikolai Diekert
Director of Product Management at Coupa Treasury

Nikolai Diekert is a Director of Product Management at Coupa Treasury. A certified corporate treasurer,  he spent nearly five years at BELLIN in presales and then in product management before joining Coupa. He designs board games (Plutocracy and €uro Crisis) in his free time and holds a degree in mathematics.

Read time: 5 mins
Unleashing Your Cash Potential: Discover How Treasury and Procurement Are Revolutionizing Liquidity Management

How much cash do we have at any given time? Will we have enough cash in the right place and time to meet financial obligations? These questions might sound like the beginnings of a fairly straightforward, back-office project. But coming off the heels of a pandemic and tightening economies, these questions get right to the heart of a company’s financial health. Corporate treasurers and cash managers have moved to the forefront of business decisions, taking on a front-line, advisory role.

Today’s treasury landscape and the complete picture of liquidity

Companies in nearly every sector and region are focusing on preparation and planning, including cash forecasting to ensure they’re prepared for any disruptions in the macroenvironment. For finance leaders, it’s more crucial than ever to know their precise cash positions and to be able to establish strong business continuity plans.

Cash managers and corporate treasurers typically start this process by looking at bank accounts and assets. But wherever disjointed systems or manual processes are involved, blind spots and sources of error quickly increase. Three out of every four companies in our May 2022 survey* revealed they need to log into multiple systems to identify cash on hand, with nearly a third admitting they need to log into more than four different systems.

Faced with limited visibility, cash managers and corporate treasurers run the risk of generating inaccurate cash forecasts, leaving working capital unoptimized, failing to take full advantage of credit card programs, and incurring unnecessary fees. These risks may have been acceptable in years past when capital was cheap. Today’s finance leaders, however, are facing increasing pressure to do more with less — maximize existing working capital, unlock capital trapped across the business, and control costs with precision.

Rather than toggling faster between a growing number of point solutions, cash managers and corporate treasurers have a better way to manage yield and forecast cash flows and requirements.

Smarter liquidity planning with early visibility into PO and invoice data

Coupa Treasury customers can now automatically unify their Coupa Treasury system data with their company’s approved PO and invoice data. This gives corporate treasurers and cash managers even greater visibility into their company’s spend, which is fundamental to improving how they manage liquidity. In real time, treasury management teams can see which payments are coming up and which have been committed. Equipped with these spend insights, corporate treasurers and cash managers can accurately forecast their cash position and keep the costs of capital down. Gone are the days of scrambling to liquify assets or borrowing at much higher costs than necessary.

Does this mean liquidity planning is easier than ever? Having worked many years in the treasury space, my answer is a confident no. Decisions are now faster and more informed, but liquidity planning itself remains complex. Corporate treasurers and cash managers still need to handle tremendous amounts of data and partner with multiple teams and functions. This is where many companies struggle. Their legacy systems and one-off solutions don’t connect and don’t scale with change. Siloes form across departments and lock crucial data inside isolated processes.

At Coupa, we help companies manage this complexity with a Business Spend Management (BSM) platform. It unifies financial data from across the business, giving cash managers and corporate treasurers unprecedented visibility into cash. (Find out why this is so critical in challenging times in this post.) A BSM platform also helps treasury management teams become better business partners, helping everyone solve bigger challenges together.

Collaboration across treasury, accounting, and procurement can transform the business

If you haven’t already considered a BSM platform investment for treasury, ask yourself:

How quickly can you compile your weekly forecast for the 13-week cash cycle? On average, do you spend more time tracking down the data, or analyzing it?

How confident are you in your ability to make a financial decision within half a business day? Within two hours?

Historically, treasury, AP, and procurement have had little to do with one another. And it’s really quite common in many companies today where functions operate in silos and on their own mandates. Treasury, for example, is primarily concerned with ensuring the company meets its financial obligations. Accounts payable (AP) and accounts receivable (AR) tend to take a backward-looking and transactional approach to spend management. Procurement has an unfair reputation for obtaining goods and services at the lowest possible cost. It’s no wonder that collaboration between these three functions is rare.

But when they’re unified through a single, digitized source of financial truth, they provide a company with powerful capabilities to create forecasts and manage liquidity planning faster and better.

“Coupa Treasury provides visibility of the many individual contracts and payment-related data. Along with heightened payment security and audit-compliant treasury processes, the structure and intuitive interface allowed us to integrate it seamlessly into our daily work.” — Fabian Seifert, Head of Group Treasury at Emsland Group

Liquidity planning at the speed of business

What challenge will the market throw our way next? I can’t tell you. But it’s safe to say that the speed of change and flows of information will continue to accelerate. Liquidity planning will look a lot more like liquidity re-planning, with treasury management teams relying on real-time, unified data from across the business to make faster and more frequent decisions about when and where to spend.

* A note on methodology:

Coupa’s IPO readiness survey was conducted among 562 finance decision makers within organizations with revenues of $250 million to $1 billion and beyond. Company sizes are 250 employees and larger. The sample size includes 100 respondents in each of the UK, France, and Germany plus 250 in the US.