Money that just sits in a bank account loses value every day due to inflation and foregoes the opportunity to strengthen the company’s financial position.
Taking good care of excess cash on hand can do amazing things for your company's financial health. Treasury management doesn’t need to be complicated. At a basic level, it simply means keeping your company liquid, safe, and earning a modest, reliable return.
This guide breaks down treasury management in a way that works for startups, small companies, business owners, and CFOs. It covers the basic principles, the simplest tools, and what modern options fit naturally into a responsible cash strategy.
Corporate treasury is the part of the business that manages:
Think of treasury as the company’s internal “financial engine room”. If it runs well, the entire business feels safer and more stable.
For smaller companies, treasury often sits with the founder, CFO, or head of finance - and usually without any formal structure. But even a simple, clear setup can give a company a major advantage: steadier liquidity, better planning, and higher returns on idle cash.
Treasury focuses on two essentials:
The company must always have enough cash available to pay suppliers, run payroll, and handle unexpected expenses
The company should not take unnecessary financial risks for the sake of yield. Treasury prioritises staying safe first - returns second.
There are three non-negotiable principles you should follow when managing corporate cash:
For small companies, risk tolerance should be:
“Don’t lose money.”
Treasury is about capital preservation. That means:
Don’t put everything in one bucket. Even for small companies, you want:
Every company should know its:
Good treasury management is simply about allocating these three buckets wisely.
Even a two-page document is enough to create structure. Your treasury policy should state:
This prevents emotional or impulsive decisions.
It also makes internal approvals easier and keeps everyone aligned.
Cash management is about making sure the company never runs short.
This involves:
For small companies, the biggest issues are usually:
A small improvement in cash forecasting makes treasury investment possible. Once you clearly know what part of your cash must stay liquid, everything else can be invested safely. As a small business, consider setting up an emergency fund to cover unexpected invoices or shortfalls from late payments.
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Treasury investments fall into three simple categories:
This is your operational cash used to cover business operations and should remain in:
Low return, but absolute safety and easy access.
This is typically where most treasury sits. Options include:
Less relevant for treasury unless you have a large cash cushion.
These include:
Long-term assets fluctuate in value and shouldn’t be used for operational cash.
Risk management is simply asking:
CFOs mainly face:
Modern treasury tools give finance teams:
Today, treasury platforms offer more transparency than ever before: Positions are tracked continuously, and reporting doesn’t usually rely on quarterly statements. That makes it easier for CFOs - especially in smaller teams - to maintain oversight without hiring a dedicated treasury analyst.
To take good care of your treasury, you don’t need a large team - you need clarity.
For a mid-size company, you need at minimum:
Their treasury governance should cover:
Evaluating treasury operations involves defining key performance indicators (KPIs). These metrics help assess whether financial strategies align with business goals. Clear KPIs provide insight into liquidity, risk management, and investment performance.
Common Treasury KPIs:
Continuous improvement is essential for adapting to market changes. Regular audits and reviews highlight areas for enhancement. This proactive approach ensures that treasury strategies remain effective and aligned with the company's evolving financial landscape.
Treasury management doesn’t need to be complicated or intimidating. With a few clear principles - safety, liquidity, diversification - any company can turn idle cash into a reliable financial asset.
Traditional tools like MMFs and T-Bills remain essential. Modern tools like digital credit add flexibility, higher transparency, and better short-term yield.
The companies that handle treasury well are the ones that grow with confidence: they stay liquid, stay safe, and let their cash consistently work for them.
