Treasury and cash management. 6 chapters and a final quiz.

Chapter 1. Cash before profit.

A company almost never fails because it is not profitable right now; it fails because it runs out of cash. Days, sometimes months, pass between issuing an invoice and having the money available in the account: customer payment terms, PSP settlement times, inventory sitting on shelves. Accounting profit ignores that time; cash bears all of it. Hence the saying among finance teams: profit is an opinion, cash is a fact.

For a merchant, online or in store, half of forecasting is knowing your incoming cash flows in detail: which payment method, which PSP, what payout delay, which fees and holdbacks. The next chapters cover exactly that. Modern treasury starts in the payments back office.

Chapter 2. Forecasting cash with payment data.

Two forecasting methods coexist. The indirect method starts from profit and adjusts for non-cash items; it is used for the annual plan. The direct method adds up expected receipts and disbursements line by line, and it drives the 13-week forecast. The best receipt lines come from the payment systems themselves, because each payment method has its own time to funds availability, predictable and documented.

{
  "payoutId": "po_20260715_0193",
  "expectedArrival": "2026-07-15",
  "currency": "EUR",
  "grossSales": 48210.40,
  "refunds": -1102.90,
  "chargebacks": -420.00,
  "fees": -689.75,
  "rollingReserve": -2410.52,
  "netPayout": 43587.23
}

The last link is reconciliation: each payout must be matched to the corresponding line on the bank statement. Every discrepancy, whether a late payout or an unexpected holdback, must flow back into the forecast. The most mature treasury teams automate this matching by comparing PSP reports on one side with ISO 20022 statements on the other. Chapter 6 comes back to this.

Chapter 3. PSP settlement times, reserves, and funds in transit.

Between the customer’s payment and the credit to your bank account, the money is in transit. It exists and it is yours, but you cannot spend it. At a payment institution or e-money institution, these funds must be safeguarded in dedicated accounts, separate from the PSP’s own funds, a regulatory protection that kicks in if the provider fails. For treasury purposes, though, in transit means unavailable.

Chapter 4. Working capital and the cash conversion cycle.

Working capital (besoin en fonds de roulement, or BFR, in France) measures the cash tied up in the operating cycle: working capital = inventory + receivables − payables. Expressed in days, it becomes the cash conversion cycle (CCC): DSO + DIO − DPO. DSO is days sales outstanding, DIO days inventory outstanding, and DPO days payables outstanding. With a DSO of 35 days, a DIO of 40 days, and a DPO of 50 days, you get 35 + 40 − 50 = 25 days. For those 25 days, the company finances every euro in the cycle.

Prepaid e-commerce is the ideal case: cash comes in immediately at order (DSO close to 0) and suppliers are paid at 45 or 60 days. Working capital turns negative, and growth generates cash instead of consuming it, the model that historically powered big-box retail and the e-commerce giants. By contrast, a B2B business that invoices at 60 days and carries inventory sees its working capital balloon as it grows. The more it sells, the more financing it needs.

Chapter 5. Cash pooling: centralizing group cash.

In a group, the worst treasury scenario is also a common one: subsidiary A invests its surplus at 1.5% while subsidiary B borrows at 4%. Cash pooling eliminates that absurdity by centralizing the positions. Some entities’ surpluses fund others’ needs, and only the group’s net balance is invested with or borrowed from banks.

Chapter 6. TMS, bank connectivity, and short-term investments.

Beyond the spreadsheet, a TMS (treasury management system) industrializes treasury: automatic aggregation of balances across banks, forecasting, and secure payment execution. It also covers approval workflows and payment fraud prevention, along with debt, investment, and hedging management. Kyriba, founded in France, has become the global leader in cloud TMS. SAP Treasury targets integrated groups, while Sage XRT and Agicap serve small and midsize companies, so the market covers every company size.

• EBICS: the standard channel in France and Germany; robust, inexpensive, and ideal for statements and domestic payment files
• SWIFTNet (often through a service bureau): global connectivity for international groups with multiple banks
• Bank APIs (PSD2 and premium): real-time balances and transfers, growing fast for intraday cash management
• Proprietary host-to-host: a direct link to a main bank, custom-built but hard to exit

<Ntry>
  <Amt Ccy="EUR">43587.23</Amt>
  <CdtDbtInd>CRDT</CdtDbtInd>
  <Sts><Cd>BOOK</Cd></Sts>
  <BookgDt><Dt>2026-07-15</Dt></BookgDt>
  <NtryDtls>
    <TxDtls>
      <Refs><EndToEndId>po_20260715_0193</EndToEndId></Refs>
    </TxDtls>
  </NtryDtls>
</Ntry>

The loop is closed. The transfer’s EndToEndId matches the payoutId in the PSP report, so reconciliation becomes automatic. camt.053 statements (end of day) and camt.054 notifications (debit/credit advices) are gradually replacing the venerable MT940, and their rich structured data makes reconciliation possible with no human intervention.