Financial Management

Bridging Treasury and FP&A: Building a Single View of Cash, Liquidity and Risk

FP&A forecasts the P&L; treasury protects the balance sheet. In many organizations, the two functions work in parallel rather than together. Treasury builds cash and liquidity forecasts in one system, while FP&A models revenue and expenses in another — often with different assumptions. The result is misaligned decisions and surprises when cash doesn’t match the plan.

A Unified Cash Forecasting Framework

To bridge the gap, CFOs are pushing for a unified cash forecast that combines:

Operating cash flows from FP&A models (collections, disbursements).
Financing cash flows from treasury (debt, interest, hedging).
Investing cash flows from capex and M&A plans.

Modern FP&A and treasury platforms can share data, so changes in revenue projections or working capital assumptions automatically update liquidity views.

Integrating Treasury Management Software with FP&A Tools

Treasury management systems track bank balances, debt facilities, investments and hedges. When integrated with FP&A platforms, you can:

Pull current cash positions and committed facilities into planning models.
Apply planned draws and repayments to forecast interest and covenants.
Simulate FX and rate movements against forecast cash flows.

This increases confidence in funding plans and reduces the risk of breaching covenants or facing unexpected shortfalls.

Working Capital as a Shared Responsibility

Working capital management sits at the intersection of treasury and FP&A. By modeling DSO, DPO and inventory days inside FP&A tools and linking them to treasury’s cash view, finance teams can test:

The cash impact of changing payment terms or collection strategies.
The trade-off between more inventory and service levels.
The benefit of early payment discounts or supply-chain financing.

Scenario Planning for Cash and Liquidity

Scenario planning shouldn’t stop at the P&L. Joint FP&A–treasury models can explore:

Downside revenue scenarios and their impact on liquidity buffers.
Capex acceleration or deferral options and their funding needs.
Potential M&A transactions and required financing structures.

Having a single platform where these scenarios live avoids version chaos and ensures everyone is working from the same numbers.

Governance and Operating Rhythm

To keep treasury and FP&A aligned, establish a regular cadence:

Monthly joint forecast reviews.
Quarterly strategic reviews of capital structure and risk.
Ad-hoc sessions when market conditions change materially.

Use shared dashboards that highlight both P&L and cash perspectives so conversations remain balanced.

Final Thoughts

Bringing treasury and FP&A together — supported by integrated software — gives CFOs a coherent view of performance, risk and runway. When revenue, margin and liquidity are modeled in one connected environment, finance leaders can make decisions with far more confidence and far fewer surprises.