7 Keys to Improving your Company’s Treasury

On many occasions, the problems of treasury end up drowning out good projects or mortgaged the future of many businesses. And it is curious because the reality is that treasury control does not require great knowledge, but simply order and constancy.

So, since it is essential to have a healthy treasury to be able to make correct decisions, we make 7 proposals of easy application to improve its level:

1. Control your customers’ credit risk

The first step in improving the treasury is to charge your customers on time. Good business risk management reduces the possibility of non-payment. So, the corporate service provider suggests you design your own credit sales strategy for your client portfolio.

  • Controls the maximum amount of risk per customer

  • Limit the collection time for each customer

  • Agree with the conditions with clients at the beginning of the negotiation

  • Secures collection with Credit Insurance companies

If you are dealing in shares, it is important to inform about penalties for not holding AGM to all the shareholders. 

2. Properly negotiate payment dues to your providers

It sets a single payment day to suppliers, always respecting the maximum legal period set at 60 calendar days. This will simplify the payment process and increase control of your treasury.

3. Forecast collections and payments

A good treasury forecast is a key that will help you know your needs and react well in advance. To make it easy, it’s very important that the accounting is up to date, that the maturity is recorded, and that you have an annual budget.

4. Reduce your inventory

Many companies have an excessively high inventory level, which means having the treasury placed on the shelves.

Corporate service provider suggests adjusting the inventory level to the rotation level. It’s better to buy less, even if it gives us the impression that buying more comes out cheaper, that’s not true when we do it on credit

On the other hand, you must analyze obsolete products to sell them, even at cost price, and thus recover liquidity.

5. Minimize billing time

You must issue the invoice immediately after delivery or provision of the service so that the collection period begins as soon as possible.

6. Always keep your financial information up to date

A complete, up-to-date, and reliable accounting, as well as a cash control and management system, will allow you to have the right information for decision making. Keep complete information about penalties for not holding AGM to prevent yourself from fine. 

7. Don’t rule out funding 

Having lines like advance bills, or crowdlending, can give you a lot of flexibility and a quick response to your needs. These services do not count as bank debt so they do not appear in the company. And that can be very useful when your rating is adjusted and shows an unreactive risk profile.

With the application of these simple measures, you will see how the level of cash available in the company increases, you will have better management information, and decrease the level of dependence on external financing.

If you are still unable to control your finances, hire the services of the corporate service provider as these companies help in financing and taxation procedures for small enterprises. 


Updated: May 15, 2021 — 9:01 am