How Manufacturing Treasurers Can Transform Their Cash Management Capabilities

Written by Jason Mountford
January 19, 2024

The manufacturing sector is no stranger to volatility and uncertainty. With reliance on global logistics, dealing in multiple currencies and the need for a consistent supply of commodities and raw materials, the landscape never stays stagnant.

But even so, the last few years have been unusual in the scale and scope of this uncertainty. Even now, inflation remains higher than it has been for many years, and in some cases supply chains still aren’t quite back to ‘normal.’.

As a consequence, interest rates are also up which has significant flow on effects to financing, both long and short term. The geopolitical environment remains complex too, and according to JPMorgan’s recently published economic outlook, growth and consumer spending is projected to slow in 2024. 

For treasury management in manufacturing, this means that the years of navigating the company through shark infested waters aren’t over yet. That all might sound a bit pessimistic, but for modern treasurers who are prepared to embrace technology, it actually provides the opportunity to step ahead of the competition and improve market share.

Specifically, that comes down to data. The more accurate and timely your financial data is, the more reliable your financial projections can be. And by creating a greater level of certainty in a market segment that is characterized by uncertainty, treasurers can open up a real competitive advantage.   

In this article, we’re going to be working through some of the unique challenges of cash and financial management in the manufacturing sector, and show you how technology is helping to simplify corporate financial operations and drive growth. 

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Manufacturing Complexities and Challenges

Complexity is an unavoidable component of the manufacturing sector. There are a dizzying number of moving parts, from sourcing raw materials, staffing factories, significant regulatory burden, investing in R&D, managing safety, delivery and logistics, and of course, the actual physical manufacturing process itself.

From a cash management perspective, these issues are further complicated by operations that are almost always conducted across borders, in multiple currencies and with a large number of individual vendors and customers.

Some of the specific challenges we see as most pertinent right now include:

Commodity Price Volatility

One of the constant challenges in manufacturing is the price of the raw materials to create finished products. This is an issue that treasurers and FP&A teams must always keep front of mind, because commodity prices can be volatile. A drastic swing in the wrong direction can decimate the bottom line.

Of course there are ways to manage this risk through the use of forwards contracts or other financial instruments, but these don’t come without cost. Companies who best manage this risk have a major advantage over those who fail to plan for higher prices.


The cash conversion cycle in manufacturing can be lengthy, while the upfront costs to design and manufacture products can be large. Those two factors add up to a narrow line to tread when it comes to liquidity.

It doesn’t take much of a hiccup in the supply chain to cause some serious short term cash flow problems, even if the overall financial health of the company is good. For treasurers, this means the need to have excellent oversight on the cash position of the company at all times, and the ability to be agile in the face of unexpected events or delays in payments. 

Payments and Transaction Volume

With so many components to the manufacturing cycle, there are a vast number of vendors and customers to keep track off. Combine that with a wide variety of payment terms, multiple currencies and other complexity such as volume discounts or government rebates, and keeping a handle on transactions and payments can be very difficult.

Key to managing this is cash management software that allows treasurers to cut through the noise and easily identify transaction types, date ranges or even individual payments. Trouble is, that’s easier said than done when using a traditional treasury management system.

Macroeconomic Conditions

All of the issues we’ve looked at so far are going to be different from company to company. But regardless of what your company manufactures, macroeconomic factors are going to have an impact on your business.

Inflation is expected to remain elevated for some time yet, and that means higher interest rates and continued pressure on salary expenses. All of these macro issues need to be factored into financial projections, and ideally multiple scenarios given the level of uncertainty in these areas over the coming years.

Geopolitical Issues

Going hand in hand with these macro economic factors are geopolitical ones. Events such as the war in Ukraine can have a flow on effect to inflation and commodity prices and cause disruptions in global supply chains.

Obviously treasurers can’t specifically plan for these types of things, but maintaining sufficient liquidity and a cash allocation process that is agile, can at least make it easier to deal with them efficiently when they arise.

Check out our recent episode of Fintech Corner as Jeff Macke, founder and President of Macke Asset Management, interviews Brett Turner, Founder & CEO of Trovata, and Joseph Drambarean, CPO & CTO of Trovata, about the impact of 2023’s volatile market and how cutting-edge technology is empowering finance teams to respond.

How Technology is Transforming Treasury Management in Manufacturing

All of these challenges can be managed better with access to the right data. One of the simplest, yet most difficult aspects for treasurers is gaining a clear and accurate view of a company’s current position. Financial data is spread across dozens (if not hundreds) of different accounts, portals and platforms, and this is all cobbled together manually into spreadsheets and sent around the world via email.

It’s inefficient and ripe for errors, miscalculations and delays. Those are the real issues. A skilled treasurer can make decisions that can navigate a company through just about any challenge, but they can’t be expected to make them correctly if they have incomplete, outdated or just plain incorrect information to base them on.

Here are some of the key tech innovations that are serving as the back end for modern cash management solutions like Trovata, helping treasurers see more and do more, in far less time.

1. Data Lake

The disparate nature of banking data no longer has to be an issue for treasurers to contend with. Trovata’s data lake consolidates all of a company’s banking and transaction data into a single platform. 

For treasury and finance teams, that means no need to log in to multiple banking portals, export balances and transaction listings and combine them manually to provide a cash report to senior executives and decision makers. The data is all there. All the time.

So when an unexpected problem arises that could impact short term cash flow, there’s no need to scramble for hours or even days to get an understanding of the exposure and risk to the business. Treasurers can see the lay of the land immediately, and spend that valuable time on strategic decision making, instead of information gathering. 

Even for more long term planning and forecasting, data consolidation is a huge help. For example, if a manufacturing business relies heavily on copper, the ability to sort, find and categorize transaction data on previous costs incurred in purchasing it will be highly valuable. Not only that, but with the use of AI and machine learning (more on that in a minute), it’s simple to build in additional details such as the mean standard deviation of these costs based on price volatility of the commodity.

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2. Open Banking APIs

But how is it possible to ensure 100% accurate, real time cash balances and transactions across potentially thousands of different accounts in multiple currencies? 

Through the use of open banking APIs. This technology connects your banking portal directly to the centralized platform (such as Trovata) and provides a data feed that is updated in real time. It creates a situation where there is no practical way for there to be an error in the data. What the bank account shows is what is shown on the Trovata dashboard.

The automation of the cash consolidation process is a game changer for treasury departments. It removes the manual work needed in the traditional cash consolidation process, saving hours every single week. Because it directly mirrors the real banking data, it also removes the risk of spreadsheet formula errors or transcription mistakes.

Trovata’s dashboard gives treasurers a real time view of the entire company’s current cash position, ensuring that strategic decisions are based on data that is current and accurate.

But the benefit of open banking isn’t just limited to viewing current balances. Payments can also be consolidated, with treasury teams able to transact individually, or with bulk payments directly through Trovata. 

For manufacturing companies that have a large number of vendors and staff to pay, this can drastically cut down on the time it takes to make and review transactions. At the same time, it improves security by limiting the number of users with direct access to your banking portals, allowing you to easily reset or remove credentials as needed.

treasury management in manufacturing

3. Cloud Native Platforms 

So all of your financial data can be found in one place, and all your payments can be made from one place, but the likelihood is your team won’t all be in one place. With manufacturing businesses often operating across multiple time zones, collaboration is as important as it is difficult.

The traditional, spreadsheet heavy method of treasury and cash management introduces significant risks, relying on emails and inconsistent document naming conventions to attempt to get everyone on the same page. Is spreadsheet V3.4A or V3.4B the current master version? We’ve all been there.

Instead, using a cloud based software platform eliminates this issue. It removes siloes within a business, making sure that everyone, from the Bay Area to Bangalore, is working on the same dataset and the same source of truth.

There no longer needs to be any concerns about the wrong version of a spreadsheet being sent to a senior executive, who then bases their strategic decision making on outdated or incorrect data.

With Trovata, everyone in your business can collaborate on the same datasets, the same account balances and the same forecasts, based on permissions you set.

4. AI and Machine Learning

Data lakes, open banking and using the cloud means that your foundational financial data is complete, accurate and current. But getting all of that financial information in one place is just the start. The real value comes in how treasury teams are able to categorize, view, and analyze it.

For that, generative AI is a tool that gives anyone in your team the same capabilities as a highly trained financial analyst. Tools like Trovata AI allow users to create forecasts, model scenarios, find transactions, and categorize data in just about any way possible, without needing to know how to build complex financial models or code.

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For manufacturing sector treasurers, that means being able to build cash flow scenarios on almost anything, in a matter of minutes, using nothing more than natural language prompts. Another blockage in the Suez Canal? Simply ask Trovata AI to create a forecast based on an increase to your Days Sales Outstanding.

All across the team, that means less time on working through the ‘what’ of the financial landscape, and more time spent on how best to navigate it.

For the more day-to-day aspects of the finance and treasury teams work, Trovata AI helps with historical data too. Users can search for transactions based on any number of variables, such as transaction size, currency, date range, vendor type or any combination of multiple traits, all through normal conversational requests.

Transform Cash Management with Trovata

Simply put, Trovata transforms cash management for manufacturing businesses. That might sound like a big call, but the truth is it’s what we hear time and time again from our customers like Krispy Kreme, Eventbrite, Block (previously Square), Orbus, Sonos, Bosch and more.

The aggregation of all of your banking data into a single source of truth makes managing cash a completely different experience, removing the frustration of accessing the right data and shifting priority to making the right strategic decisions. 

From there, being able to manage and transact on this cash removes hours of busy work and manual consolidation for treasury and finance teams, and the ability to interact with your financial data using generative AI adds a whole new dimension to the ways you can manipulate your data. 

With volatility and complexity a given in the manufacturing sector, upping your financial and cash management capabilities gives you and your team a leg up in dealing with it. 

If you’d like to see how Trovata can improve your cash visibility, bank reconciliation, financial forecasting, scenario planning and more, book a demo today.

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