Corporate treasurers: Linchpins in supply chain resilience

Amid evolving trade policy, treasurers can bring their expertise in liquidity, currency, and insurance to decisions on supply chain shifts.

Generative AI is a growing capability for treasurers

As uncertainty continues regarding trade policy, many organisations that import or export goods are taking measures to manage supply chain risks. With their deep understanding of working capital and liquidity, corporate treasurers can play a leading role in helping promote financial transparency and stability as companies are making supply chain-related decisions.

Depending on a company’s supply chain network, leaders might consider any of several possible actions, such as diversifying suppliers, building inventory buffers, nearshoring or onshoring production, or renegotiating contracts, among others. Any of these moves could have a significant influence on future growth opportunities and financial outcomes.

“Corporate treasurers can act as strategic advisors in contingency planning efforts to help manage potential financial consequences that could arise, such as changes in funding levels, currency exposures, and lending that could result from such actions,” says Erik Smolders, managing director with Deloitte Risk & Financial Advisory, Deloitte & Touche LLP, and a former corporate treasurer. “Treasurers can also proactively assist with evaluating insurance and inventory risks. They really should be at the right hand of the CFO in times of volatility.”

How Corporate Treasurers Can Help: 3 Areas

“Corporate treasurers can work closely with procurement, sales, finance, and other teams to manage a complex web of supply chain-linked financial risks resulting from evolving trade policies,” says Smolders. Treasurers can have a significant strategic impact on potential financial risks in three important areas, including:

Working capital and funding. Treasurers play a vital role in evaluating working capital and funding risks, including those that arise from supply chain actions. “When supply chains are altered, such as through rerouting products, it can have significant effects on the organisation’s financial leverage,” says Smolders. “For example, inventory that is in transit longer or that takes more time to deliver to customers may require additional funding or financing, potentially straining short-term liquidity.”

Treasurers can evaluate how changes to the flow of materials, such as inbound procurement and outbound distribution or shipping, may affect working capital. They can also help monitor changes in payment terms and supplier relationships that could have consequences for the organisation’s cash position.

Currency volatility. Treasurers play a crucial role in managing currency fluctuations and volatility, which can significantly impact an organisation’s financial stability. “Treasurers need to ensure that currency exposures are properly identified and mitigated,” says Smolders. “This involves being aware of changes in supply chains that can affect currency exposures, such as rerouting products through different jurisdictions.”

It is important for treasurers to keep a close eye on foreign exchange rate movements, which are likely to remain fluid, says Smolders. “Corporate treasurers should spend time identifying, hedging, and locking in their currency exposures, while also allocating liquidity where it is needed most,” he adds.

Insurance. Many treasurers are responsible for managing insurance portfolios within their organisations. This often includes responsibility for forecasting insured values, which can be affected by changes in supply chains.

For example, if products are in transit longer, the insured values increase, and if new distribution centres are opened, there may be new insurance requirements for those facilities. It’s also possible that policies could be reduced as a result of nearshoring or reshoring certain aspects of supply chain operations. “It is critical for treasurers to monitor shifts in supply chains and adjust insurance policies accordingly to help provide adequate coverage levels and guard against being overinsured or underinsured,” says Smolders.

Modernising Treasury to Gain Visibility, Agility

In addition to monitoring and navigating the financial consequences of supply chain actions, treasurers can leverage the current period of volatility to consider uses of technology, which continue to be an important tool for providing treasurers visibility into operations and assisting with managing currency fluctuations.

Technology such as integrated cash flow forecasting tools and automated currency exposure management systems can assist treasurers in gaining a clearer view of their cash positions and new risks in need of mitigation. These tools can help treasurers quickly detect changes in payment terms and currency exposures due to shifts in supply chains. By connecting these tools to an organisation’s ERP system, treasurers can monitor changes and see that they are reflected in cash flow forecasts and currency exposure management processes.

“Generative AI is a growing capability for treasurers where adoption and use cases are emerging and becoming more refined,” says Smolders. The technology can offer significant potential in areas such as cash flow forecasting and currency exposure mitigation. “Forecasting and currency exposure are fundamentally rooted in pattern recognition, which AI can perform rapidly and with more granularity,” he says.

As agentic AI develops, emerging tools may likely perform such tasks as daily cash positioning, monitoring bank account balances, moving funds, suggesting investments for surplus cash, and withdrawing money from investments during cash shortfalls. These represent promising areas for simplifying cash management tasks to improve financial stability, especially during periods of rapid change, as with changes in supply chains.

Corporate treasurers are uniquely positioned to navigate the complexities of evolving trade policies and supply chain disruptions, says Smolders. “By leveraging their expertise in working capital, currency volatility, insurance, and inventory management, treasurers can provide strategic guidance to help manage risks and promote financial stability and transparency,” he says. “Embracing advanced technologies further enhances their ability to act as strategic advisors who can play an essential role in promoting their organisations’ resilience and success.”

Tammy Whitehouse is senior writer, Executive Perspectives in The Wall Street Journal, Deloitte Services LP.

As published by the Deloitte US Chief Financial Officer Program in the 1 May 2025 edition of The CFO Journal in WSJ.  

 

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