Treasury and payments management

A company can be profitable on paper and still find itself without the money to pay suppliers and salaries. The gap between profit and liquidity is why treasury — the management of collections, payments and available cash — deserves the same attention as the income statement. It is not something to improvise at month-end: it is a continuous process that decides whether the business stays solvent.

Profit and cash are not the same thing

The income statement records revenue when it accrues, not when the money comes in. An invoice issued at 60 days is already revenue, but the cash arrives two months later. In the meantime the VAT on that invoice must be paid, suppliers must be paid, and salaries with AHV/IV/EO (state old-age, disability and income-compensation insurance) and BVG (occupational pension) have precise deadlines. It is the working capital that puts you in difficulty: growing too fast, with customers who pay late and suppliers who are paid promptly, burns cash even with plenty of orders.

The cash flow forecast

The central tool of treasury is the cash flow forecast, as a rule over an 8-to-13-week horizon, updated consistently:

List the expected inflows by realistic collection date, not by theoretical due date.
List the outflows with their due dates: suppliers, salaries, social charges, VAT, taxes, leasing, rents.
Compare, week by week, the forecast balance with the available liquidity and credit lines.

The aim is to see the critical weeks in advance, when the balance risks falling below a safety threshold, so you can act early and not at the last minute.

Managing collections

Many cash problems arise on the customer side. Some concrete levers:

Clear payment terms in the offer and on the invoice, with conditions defined from the outset.
Fast invoicing: every day’s delay in issuing an invoice is another day of waiting for the collection.
Systematic reminders as soon as the invoice is overdue, with a regular process rather than left to chance.
Advance payments on major orders and checking the reliability of new customers.

In Switzerland, in the event of non-payment, the debt enforcement procedure (under the DEBA — Debt Enforcement and Bankruptcy Act) through the Debt Enforcement Office is the ordinary route for recovering claims; it is better, however, to act much earlier with good internal oversight.

Managing outgoing payments

On the outflow side the watchword is order, not systematic delay. Paying suppliers late to hoard cash wears down relationships and can cost interest or the loss of discounts. Better to:

Use the agreed terms in full, without paying in advance unless there is a discount that justifies it.
Schedule payments in blocks, aligning them with expected inflows.
Always keep in mind the tax and social deadlines, which allow no delay.

Reserve liquidity and credit lines

A prudent treasury keeps a liquidity buffer to absorb unexpected events and seasonality. Where the buffer is not enough, a bank credit line agreed in advance provides breathing room in the peak weeks of outflows. The rule is to negotiate it when the accounts are in order, not when the water is already up to your neck: the best terms are obtained from a position of strength, with solid financials and credible forecasts to show the bank.

Common mistakes

Looking only at profit and ignoring collection and payment timing.
Not keeping an up-to-date cash forecast and discovering problems too late.
Leaving reminders to chance, lengthening average collection times.
Having no reserve or credit line for unexpected events.

In short

Profitability and liquidity are two different things: monitor both.
The 8-to-13-week cash forecast is the basic tool.
Speed up collections and order your payments without wearing down suppliers.
Keep a reserve and a credit line agreed before the need arises.

How we help

We set up cash forecasting, collections and payments oversight and working-capital monitoring for businesses, with clear, up-to-date reporting to support decisions. Let’s put your treasury in order.