Three Things a CFO Should Stop Asking Treasury

Treasury teams across mid-market and enterprise companies spend a remarkable amount of time answering three questions that no longer deserve the attention they receive. The questions made sense when the underlying infrastructure was slow, opaque, and expensive to query. That world is gone. The questions persist out of habit.

If you sit in the CFO seat, here is what to stop asking.

One: 'What is our cash position right now?'

The right answer to this question, today, is 'check the dashboard.' The wrong answer is what most treasury teams are still doing, which is producing a daily cash report compiled from bank balances pulled by hand or via overnight files.

Real-time bank API connectivity is mature for nearly every meaningful banking relationship. Treasury management systems can produce a live cash position with intraday refresh. If your team is still producing a morning cash report at 9am, you are paying for a workflow that should have been automated four years ago.

The CFO question worth asking is not 'what is our cash position.' It is 'what is our forecasted position six weeks out, and what are the assumptions behind it.' That question is far more useful and far harder to automate, which is exactly where treasury talent should be spending its time.

Two: 'Why did the FX hedge result differ from expected?'

FX hedge effectiveness questions are a vortex. They consume hours of treasury time producing variance analyses that the CFO scans, nods at, and forgets. The underlying reality is that any hedge program with reasonable rules will produce a result close to but not exactly equal to the expected outcome, because spot moves and timing differences exist.

The useful question is at the policy level. Is the hedge ratio appropriate for the business's actual exposure to a given currency. Is the program covering the right tenors. Is the cost of carry justified by the volatility it removes.

Those questions get asked once a year in most companies. They should be asked quarterly.

Three: 'Can we get better pricing on this banking service?'

In the era of relationship banking, the answer was often yes, but the negotiation was slow and the gains were modest. In the current environment, the answer is more often: yes, by switching to a fintech provider that has unbundled the specific service.

CFOs who push treasury to negotiate harder with the same set of relationship banks are usually leaving more on the table than they realize. The right question is 'which services should we be procuring from non-bank providers,' and the answer increasingly includes payments operations, FX execution, and account infrastructure.

What to ask instead

The three questions worth asking treasury today are: what is our six-week cash forecast and the sensitivity, what would have to change in our hedge policy to justify a different ratio, and where in our banking stack are we paying for services we should be procuring elsewhere.

Those questions move the needle. The old questions do not.