Listening to the Signals

The health of a business rarely reveals itself first in its financial statements.
More often, it appears earlier in the movement of cash.

Working capital and liquidity function much like the vital signs of a living system. Just as a physician listens to a patient’s heartbeat to understand the condition of the body, the treasury holds a similar diagnostic instrument. Through the rhythm of receivables and payables, the timing of cash movements, and the pressure points within working capital cycles, treasury can hear signals about how the organisation is truly operating.

But hearing those signals is only the beginning. The real value lies in understanding what is driving them — and in building the frameworks that allow those drivers to be identified and managed early.

My perspective on this developed gradually through earlier operational and FP&A experience before moving into treasury leadership.

Where the Mindset Began

Early in my career, I worked alongside engineering teams during large industrial turnaround projects. I was part of a cost and budget control function supporting complex operations and was closely involved in maintaining the programme’s project risk register.

That environment shaped how I think about finance.

Risk registers were not static reporting tools. They were living frameworks that required teams to identify potential issues early, evaluate probability and impact, and continuously monitor the drivers that could turn risk into reality. The focus was never on documenting problems after they occurred. It was on understanding the conditions that might create them.

When I later moved into financial planning and analysis, I recognised the same logic expressed in financial terms. Forecasting becomes meaningful only when it reflects the operational drivers behind the numbers. FP&A disciplines encourage to look beyond results and focus on the mechanisms that produce them.

The underlying philosophy remained remarkably consistent: identify risks early, isolate the drivers behind them, and build frameworks capable of addressing those drivers before they translate into financial consequences.

If I were to summarise that philosophy in two words, they would be risk mitigation.

What FP&A Brings to Treasury

This mindset proved particularly valuable when I later moved into treasury leadership.

Treasury traditionally focuses on liquidity management, funding stability, and financial risk control. Those responsibilities remain essential. However, an FP&A background introduces an additional perspective: the ability to interpret liquidity not as a balance to manage, but as the outcome of deeper operational dynamics.

Cash flow becomes more than a figure to monitor. It becomes a signal.

Driver-based thinking, central to modern FP&A practice, encourages treasury leaders to ask a different question: not only whether liquidity is sufficient, but what system of behaviour is producing the liquidity profile we observe.

This shift in thinking transforms treasury from a function that reports balances into one that helps interpret financial signals across the organisation.

Two Treasury Lessons

This perspective became particularly clear to me through two very different treasury environments.

In one organisation with highly developed treasury capabilities, a short-term liquidity forecasting framework had been in place for more than a decade. The process was executed diligently and supported by experienced treasury professionals across multiple regions.

Yet the model itself remained extremely basic and focused primarily on reporting balances.

What struck me most was not the simplicity of the tool itself, but the role treasury had been assigned within the organisation. Treasury was expected to monitor liquidity and report figures, but not to analyse or influence the operational drivers behind those figures. The forecasting model reflected that expectation. It performed its reporting function well, but it was never designed to diagnose or influence the underlying dynamics shaping liquidity.

In another organisation, I encountered the opposite technical situation but the same structural pattern. The business invested in a sophisticated forecasting model developed with external expertise. However, the operational framework required to support such a model did not yet exist. Policies, procedures, planning discipline, and consistent data structures were still developing.

Despite the model's technical ambition, treasury’s role remained similarly isolated from the operational environment. The model attempted to forecast liquidity outcomes without integrating the operational drivers that ultimately produce them.

Although the technical circumstances were very different, both environments revealed the same structural disconnect. Treasury was positioned as a recipient of financial outcomes rather than a participant in understanding the drivers behind them.

For someone coming from an FP&A background, where driver-based thinking and operational forecasting are central disciplines, this separation was striking. Liquidity is not created in treasury. It is the financial consequence of thousands of operational decisions across the business.

Bringing these perspectives together creates a much stronger framework.

Building Treasury on FP&A Principles

This insight shaped the approach I took when I was later asked to establish a treasury function in a growing organisation.

Rather than beginning with forecasting models, we started by building the underlying framework: defining policies, establishing procedures, training teams, and aligning banking infrastructure with operational realities. Functions such as accounts receivable, credit control, and accounts payable were aligned more closely with treasury oversight to ensure visibility into the mechanisms influencing working capital.

The objective was not to expand treasury unnecessarily, but to ensure that liquidity analysis was grounded in operational drivers.

Only when these foundations are in place will forecasting tools deliver meaningful insights.

The Multinational Perspective

Another dimension of treasury’s FP&A role becomes particularly visible in multinational organisations.

When liquidity is analysed across multiple legal entities and jurisdictions, patterns begin to emerge that are difficult to detect locally. Each market may have its own operational constraints or regulatory environment, yet recurring drivers often appear when viewed at a group level.

Treasury’s cross-entity visibility allows it to identify these patterns and help prioritise the areas that most influence liquidity across the organisation. This perspective also intersects with governance considerations, including policy consistency, regulatory alignment, and tax compliance across jurisdictions.

From this vantage point, liquidity analysis becomes more than a financial exercise.
It becomes organisational diagnostics.

Listening Carefully

If working capital represents the vital signs of the business, treasury holds the stethoscope.

But the real value of a diagnostic instrument lies not in possessing it, but in knowing how to interpret what it reveals.

Treasury will always remain responsible for safeguarding liquidity and protecting the organisation from financial risk. Yet when informed by FP&A thinking — driver-based analysis, risk discipline, and system-level perspective — it can also help illuminate the deeper mechanisms shaping financial outcomes.

In that role, treasury becomes something more than a monitor of balances. It becomes a translator between operations and capital: interpreting the signals embedded in cash flows, identifying the drivers behind them, and helping the organisation act before financial pressures become visible in the numbers.

Perhaps this is the most valuable contribution FP&A experience can bring to treasury leadership. Not simply better models or more accurate forecasts, but a shift in perspective — from observing liquidity to understanding the system that produces it.

Because ultimately, liquidity is not merely a financial outcome. It is the echo of thousands of operational decisions moving through the organisation.

And when treasury learns to listen to that echo with clarity, it does something profoundly valuable: it helps the business understand itself.