As your business grows, so does the complexity of managing its finances. Once considered the domain of large corporations, treasury management is increasingly essential for helping small and mid-sized businesses strengthen cash flow, reduce risk, and plan for growth. 

This article explores the basics of treasury management and how business owners can leverage various techniques to streamline operations, safeguard their assets, prepare for expansion, and maximize their financial health.

What Is Treasury Management?

Treasury management oversees a business's cash flow and financial risks using techniques like cash positioning, payment controls, and liquidity solutions. It helps ensure that your company has the right amount of money in the right place at the right time to operate smoothly, meet its obligations, and invest in growth.

Treasury management goes beyond basic banking by offering sophisticated ways to track cash flow, forecast needs, control outgoing payments, and manage relationships with banks and vendors. It's especially valuable for businesses operating across multiple locations, serving different markets, or handling various income sources and suppliers.

"Isn't treasury management too complex for small businesses?" You may ask. On the contrary, it adds clarity and control, empowering business owners to make smarter decisions with real-time financial data to improve their financial health while reducing risks and staying agile. An experienced treasury management advisor can guide you through a phased implementation to use the appropriate features for your growth stage.

Let's explore the essential treasury management tools and techniques for small and mid-sized businesses.

Keep Tabs on Your Money with Cash Positioning Tools

You need a clear and current picture of your finances to make sound decisions. Cash positioning tools provide real-time visibility into where your money is across all your accounts. You can see how much is sitting idle in a checking account, tied up in receivables, or available for investment. 

Why is this information important? A lack of visibility often translates into missed opportunities, unnecessary borrowing, and overdrafts. The good news is that modern treasury tools can give you the clarity to make informed decisions and the ability to automate actions.

For example, you may maintain separate accounts for operations, payroll, and reserves. You can automate account sweeps at the end of each business day to move excess funds from your payroll and operations accounts into a high-yield reserve account. If any account dips below a preset threshold, the sweep automatically pulls funds back to cover expenses.

Make Your Cash Work Harder Without Losing Liquidity

Idle cash in a low-interest checking account is a missed opportunity. What if you could put that money to work, earning returns without sacrificing access when you need it? 

High-yield business savings accounts, money market accounts, or short-term investment vehicles offer competitive interest rates with minimal risk. They allow you to grow your cash reserves but keep them liquid enough to cover operating expenses, payroll, or unexpected costs. Meanwhile, tools like automated cash transfers enable you to move funds in and out of interest-bearing accounts based on preset thresholds, helping you maintain an optimal balance between liquidity and return without constant manual oversight. 

Other features include zero balance accounts (ZBAs), which allow you to consolidate cash from multiple accounts into a master account for easy monitoring and cash reports, which provide a snapshot of your available cash position to inform timely actions.

However, finding the sweet spot where your cash is accessible while generating value isn't always simple. A trusted banking professional can help you tailor a strategy to align your cash flow patterns, risk tolerance, and growth goals, making your cash work harder without compromising liquidity.

Streamline and Secure Payments and Receivables

Managing payments and receivables manually becomes time-consuming and error-prone as a business grows. Treasury management tools can help you save time and reduce risks associated with human mistakes and delays. For example, real-time payments like ACH transfers and wire payments move money quickly and securely. Remote deposit reduces trips to the bank, while lockbox services allow your bank to collect and process customer checks on your behalf, speeding up deposits and improving cash flow visibility.

Speed is essential, but security is just as critical. Treasury services also provide powerful fraud protection tools: Positive Pay matches checks presented for payment against a pre-approved list, dual authorization requires two people to approve high-value transactions, and transaction limits restrict the size or frequency of transfers. 

For example, you would upload the check details to your bank whenever your company issues a check. When the check is presented for payment, the bank cross-checks it against the uploaded list. The bank will alert you to approve or reject the transaction if something doesn't match. These safeguards can help reduce fraud risks and give you peace of mind.

Support Strategic Growth with Accurate Forecasting and Planning

Growing a business takes more than a vision and ambition. You need accurate insights to plan your next steps. Cash flow forecasting tools from treasury management platforms or advisory services allow you to model future income and expenses, anticipate cash shortfalls, and make proactive resource allocation decisions.

Your bank or treasury advisors can support this process by helping you model financial scenarios based on your strategic goals, such as expanding to a new location, investing in equipment, increasing headcount, or launching a new product, providing forecasts grounded in real-time financial data and tailored to your business’s unique cash cycle.

Accurate forecasting doesn’t just support internal decision-making. It also strengthens your financial profile with lenders and investors. A clear view of your future cash position enables you to negotiate favorable credit terms, manage debt wisely, and capitalize on growth opportunities without overextending your business. 

Are Treasury Management Services Right For You?

Here are the signs that you may be ready for treasury management services:

  • You're juggling growing cash balances across multiple accounts with little visibility into total liquidity.
  • Your inconsistent cash flow makes it hard to predict when to move money or cover expenses.
  • You manage increasingly complex vendor or customer structures with multiple payment types, locations, or contracts.

While treasury services were once considered tools for large corporations, modern solutions are scalable and customizable, making them suitable for small and mid-sized businesses seeking to build a sound financial structure to support long-term growth.

Moreover, you don't have to adopt all the tools and processes in one go. Many banks and treasury providers offer modular services you can implement in phases over time. For example, you may start with basic cash visibility tools or fraud prevention, then layer in forecasting, liquidity management, and payment automation as your needs evolve.

Take Control of Your Financial Health to Fuel Your Vision

Treasury management doesn’t have to be complicated. As your business grows, your financial tools should evolve with you. PNC offers scalable and flexible treasury management services that adapt to your needs, providing the clarity, control, and confidence to manage cash, protect assets, and plan strategically.

Our industry-leading approach enables small and mid-size businesses to leverage innovative technologies through the lens of our experienced teams, who understand unique industry requirements to unlock new potential for your company:

  • Payable solutions provide enhanced visibility into your financial supply chain.
  • Receivables solutions reduce manual intervention and increase straight-through processing.
  • Electronic payment options support faster and more transparent payment processes.
  • Liquidity management solutions ensure you have the right amount of cash in the right place at the right time.
  • Cash management services capture necessary information to fulfill governance and security requirements.
  • Fraud prevention tools safeguard your assets against cybercrime and payment fraud.

Moreover, we'll be with you every step of the way to implement the right tools and processes for your needs. Your dedicated advisor will work with you to evaluate your operations and growth plan, recommend the right mix of solutions, phase in the right features at the right time, and streamline your financial processes.

Ready to explore how our treasury management services can help you drive performance? Schedule an appointment to discuss your needs.