Sep 22nd 2021

Financial PerspectivesCFOs and Treasurers

3 Ways a Modern Treasurer Can Add Value to High-Growth Tech Companies

Sep 22nd 2021

The tech sector is legendary for producing startups with fast, furious growth. However, that could produce difficult environments for treasury managers. High-growth tech companies often have growing pains and associated cash management needs, giving corporate treasurers both a challenge and a unique opportunity to contribute to their organizations’ success.

Modern treasury management is critical for fast-growing companies. Treasurers in these organizations tend to face some common issues, and one thing is clear: those who focus on setting up a specific infrastructure to operate in this environment are on a path to truly help their companies achieve their goals.

Here are three ways treasurers at high-growth tech companies can contribute to an organization’s success:

1. Trusted Treasurers Set Up Tech Companies for Success

One of the most fundamental responsibilities for treasurers is to ensure that company leaders fully understand the corporate treasury function’s purpose. Beyond cash management, a forward-looking treasurer needs to be able to anticipate future funding needs, support daily operations, and manage financial risks.

For treasurers at high-growth tech companies in hyper-productivity mode, performing these tasks can be particularly challenging, and leaders should understand their unique working environment. Most treasurers at high-growth tech startups have fewer than five people in their department and only one or two direct reports. Still, they need to keep up with the company’s pace and integrate scalable solutions throughout the organization. Members of these small treasury departments are expected to be cross-functional; an assistant treasurer who works on liquidity might also work on capital structure and capital markets.

Beyond cash management, a forward-looking treasurer needs to be able to anticipate future funding needs, support daily operations, and manage financial risks.

Treasurers need understanding and buy-in from company leaders to be effective in this environment. Cash awareness, for example, is especially vital for fast-growing companies since cash reinvestment rather than funding shareholder returns is paramount. As such, the treasurers who are able to implement a pervasive culture of cash awareness can ensure reliable forecasting and planning.

2. Treasurers Can Create Successful Banking Relationships

Banking relationships—and understanding mutual expectations—are also a top concern. Modern treasurers assess whether their bank fully understands the company’s business, is able to make appropriate commitments, and has the right capabilities.

The credit underwriting process, for example, needs to meet the needs of the company’s growth status, which includes assessing whether the bank’s commercial or corporate banking team will handle the account. Ensuring access to the right bankers is vital.

The board and CEO should understand the banking relationship with treasury. The treasurer is a senior executive who often has the most experience with bankers, and as such, sets internal expectations that the relationship resides fully within treasury management.

A solid banking relationship won’t inhibit treasurers from looking beyond traditional banking. They also need to consider new technology and financial solutions that may bring efficiencies and cost savings to the company. Treasuries with bank-agnostic infrastructures that have end-to-end service delivery and speed-to-market capabilities have put their companies in better positions for significant opportunities in the future.

3. Treasurers Can Play a Valuable C-Suite Role

Treasurers can best deliver on their potential by working closely with high-growth tech company leaders to increase their visibility into the organization’s future. Understanding and remaining up-to-date on the CEO’s ongoing strategic vision is critical for treasurers to set objectives that reinforce the company’s goals and meet both current and future cash flow needs. Forward-thinking treasurers want to consider any conversations around capital or capital-intensive business objectives in their treasury planning.

For example, treasurers can develop strategies to help facilitate global expansion, either now or in the future. Treasury management with a multi-currency mindset can accommodate the acceptance of local and foreign currencies in payments and receipts.

Treasurers can win support and prove their value to high-growth tech company leaders by delivering results early. Specific and quick-to-deliver wins that address the concerns of the C-suite help communicate treasury management’s vital role in the company’s operations and future growth.

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