Cash Management at scale: Top strategies for fast-growth companies

The high costs of inefficient cash management

Innovation economy companies know that cash management is a balancing act – and it can get more complex and costly as you navigate growth. Finance leaders often struggle with maintaining liquidity while managing burn rate to support a rapidly growing workforce, developing new products and expanding into new markets. As spending scales up, it can get harder to control costs, manage reconciliation, and deliver timely, accurate forecasting. And this complexity is now compounded by an increasingly unpredictable global economy.

With the fast pace and competing priorities of high-growth companies, improving financial operations often gets put on the back burner. The finance team may be struggling to work across fragmented systems, and lack the visibility, controls and insights necessary to help you power growth and mitigate risk.

How can you more effectively manage liquidity, reduce costs, and make better data-driven decisions?

At SVB, we’ve seen that the most successful companies prioritize efficiency – including with cash management. In life sciences, for example, teams are constantly procuring supplies for R&D and need to manage reporting, all while navigating complex funding flows. Technology firms often have fast growth cycles and rely on dozens of SaaS applications for core business functions. It can be hard to track it all and prevent unexpected costs.

The right solutions for cash management help companies control spending, avoid cost spikes in their cloud infrastructure, and put idle cash to work earning revenue.

Here are some key strategies to help you build efficiency and scalability into your cash management tech stack.

Centralize and automate spend management

For starters, you want to have a unified view across your banking, corporate card and loan accounts. An optimized cash management dashboard gives you complete visibility for managing payments, liquidity, venture debt and more. And it can integrate seamlessly with your treasury management, ERP and accounting systems.

The goal is to amplify your financial control and insight, while making workflows faster, easier and more effective. 

Another success factor is having a spend management solution that streamlines and automates processes. As your spending needs escalate, your treasury concerns go well beyond available cash and credit. You’ll also want to maximize efficiency for how you manage and report all that spend. That’s why it’s crucial to have a commercial card integrated with an AI-powered spend management platform that enables you to:

• Gain real-time visibility over all purchases and payables, and control employee spend, including pre-set limits, expense codes, pre-approvals and more.
• Auto-enforce spending policies and auto-categorize expenses to improve accounting and audit trails.
• Save employee time with automated expense reporting via mobile app, and streamline reconciliation and reporting to reduce manual work for your finance staff.

You can further optimize cash management by automating accounts payable. For batch processing payments, many companies boost efficiency using their bank’s API capabilities or direct file transmission platform. You might even take advantage of using instant payments to give you more control over daily cash flow.

Leverage payment data to improve forecasting

Cash forecasting is significantly important to growth companies, particularly with today’s uncertain economy and limited funding outlook. Yet it’s often a challenge to get enough useful data. Having a robust spend management platform enables you to tap into a wealth of payments data for better budgeting and forecasting.

An AI-powered platform can quickly analyze large data sets to identify trends in payment behaviors, top spending categories, seasonal cash flow patterns and more. These insights can help you deliver more accurate forecasting, and stress-test "what if" scenarios to manage potential risks, such as delayed funding or customer churn.

Improve liquidity by putting idle cash to work

Optimizing cash management should also include strategies to generate income from surplus cash you don’t need right away. Look for options that maximize yield without having to commit idle cash for an extended time.

For instance, with SVB’s short-term CDs, you can earn income on cash held for future operating expenses or planned purchases. These CDs are designed with startup cycles in mind, and let you lock in an interest rate for as little as one month or up to a year and beyond.

Want to keep extra cash handy but still earn more interest on it? Consider using a ‘sweep’ solution. At the end of each month, any excess balance (above a pre-set level) in your business checking account can be automatically moved to an interest-bearing account. This strategy can help you improve liquidity by earning interest on cash reserves, yet you maintain full access to your money whenever you need it.

Scale cash management while reducing risk

Scaling your business in a competitive market and volatile economy can be challenging — but the right cash management capabilities can make it easier. Learn how SVB can help you — from business checking and commercial cards, to solutions for treasury management, liquidity management, foreign exchange and much more.

At SVB, we’re committed to helping innovation economy companies succeed with unique expertise and a full ecosystem of financial solutions tailored for every stage of growth.