Treasury Management Skills Growing Startups Need: 13-Week Forecasts, FX, Banking

Treasury Management Skills for Growing Startups

For many growing startups, the financial system feels fragile but functional. A mix of QuickBooks or Xero, Stripe, and a core spreadsheet holds everything together, typically managed not by a CFO but by a founder or head of operations. This setup works until it does not. As your company scales from pre-seed to Series B, moving from pure survival to strategic growth, knowing how to manage startup cash flow effectively becomes a critical skill. It is the difference between navigating predictable bumps and facing unexpected liquidity crises.

This guide provides a practical framework for improving treasury operations, focusing on three core pillars. We will cover how to gain control through forecasting, how to manage the risks of global expansion, and how to build a banking relationship that actively helps you grow.

Section 1: The Foundation - How to Manage Startup Cash Flow with a 13-Week Forecast

How do you stop being surprised by your cash balance? The answer is moving from reactive balance-checking to proactive forecasting. The goal is not perfect accuracy, but to create an early warning system for your business. For this, a rolling 13-week (one fiscal quarter) forecast is the industry standard for actionable cash management. It is the operational dashboard for your company's financial health, helping you anticipate short-term needs and deploy idle funds efficiently.

Building your first forecast does not require complex software. It begins with your existing tools. The process involves a few straightforward steps to transform your startup cash flow management from a mystery into a manageable process.

1. Gather Cash Inflows: Pull historical cash receipts from your payment processor like Stripe or your bank statements. Layer in any confirmed future payments from invoices you have already sent.
2. Compile Cash Outflows: Extract recurring expenses from your accounting software, such as QuickBooks for US companies or Xero for UK startups. This includes payroll, rent, and software subscriptions.
3. Add Known Future Events: Manually add large, one-time payments you know are coming, like tax payments, major vendor invoices, or annual insurance premiums.
4. Structure the Forecast: Arrange this data in a simple spreadsheet with columns for each of the next 13 weeks. The result is a simple, week-by-week projection of your cash position.

Once you have this visibility, you will likely identify a cash buffer sitting in your primary checking account. The reality for most pre-seed to Series B startups is more pragmatic than for large corporations. The primary goal for this cash is capital preservation and liquidity, not generating high returns. However, letting it sit is also a mistake. Cash in a standard checking account loses value to inflation (losing ~3-4% per year in real terms).

The key is to act once you have a stable cushion. A common guideline is to consider putting idle cash to work once you have more than 3 months of operating expenses in cash. This buffer ensures you can handle unexpected challenges without having to sell investments at a bad time.

Here are a few practical cash reserves strategies for your excess funds:

• High-Yield Savings Accounts (HYSAs): These are the simplest and safest first step. For US companies, High-Yield Savings Accounts (HYSAs) are FDIC-insured up to $250k. In the UK, the Financial Services Compensation Scheme (FSCS) provides a similar protection up to £85,000. They offer a better yield than a checking account with minimal risk and high liquidity.
• Money Market Funds (MMFs): Often offered by brokerages, these funds invest in short-term, high-quality debt instruments like commercial paper and certificates of deposit. They are generally safe and liquid, typically providing a slightly higher yield than HYSAs, but they are not FDIC or FSCS insured.
• Treasury Bills (T-Bills): These are short-term debt securities issued and backed by the U.S. government (or gilts in the UK). They are considered one of the safest investments in the world. You can buy them directly from the government or through a brokerage account, often with maturities of 4, 8, 13, 17, 26, or 52 weeks.

For a SaaS startup with predictable monthly recurring revenue, a 13-week forecast quickly reveals the consistent cash surplus above its three-month operating buffer. This visibility gives the founder confidence to move that excess cash into an HYSA, turning a non-performing asset into one that safely earns a modest yield while remaining accessible.

Section 2: Managing Global Growth - A Practical Approach to Foreign Exchange (FX) Risk

As you hire international talent or start selling overseas, a new variable enters your financial model: foreign exchange (FX) risk. Suddenly, your carefully planned margins are exposed to currency swings you cannot control. The key to managing foreign exchange risk is not to try and beat the market, but to eliminate surprises and create cost certainty for your business.

For an early-stage company, a staged approach to financial risk management for startups works best:

1. Invoice in Your Home Currency: The simplest strategy is to bill all international clients in your native currency (e.g., USD, GBP, EUR). This places the FX risk entirely on your customer, protecting your revenue from currency fluctuations. For a professional services firm in the UK billing a US client, this is an effective first step. The main drawback is that some larger customers may insist on being billed in their local currency.
2. Use Multi-Currency Accounts: As you scale, you may need to pay international suppliers or contractors in their local currency. Modern banks and fintech providers offer accounts that can hold, receive, and send payments in multiple currencies. This allows you to receive payments in euros, for example, and use those same euros to pay a European contractor, avoiding costly conversion fees on every transaction and optimizing payments and collections.
3. Implement Forward Contracts: When you have a large, predictable international payment or invoice, a forward contract becomes an invaluable tool. It allows you to lock in an exchange rate for a future date, removing all uncertainty about the final value of the transaction. A practical threshold is to consider a forward contract for individual international invoices or payments over ~$50k that are predictable. This means the amount and payment date are confirmed.

A scenario we repeatedly see is the P&L impact on an unhedged invoice. Consider a US-based deeptech startup that signs a €50,000 contract with a European partner, with payment due in 30 days.

• Without a Hedge: The invoice is sent when the EUR/USD exchange rate is 1.08, making the expected revenue $54,000. When payment arrives 30 days later, the rate has dropped to 1.05. The company receives only $52,500, a $1,500 loss that directly hits their margin and disrupts their financial forecast.
• With a Forward Contract: At the time of the invoice, the startup executes a forward contract with their bank to sell €50,000 for USD at a rate of 1.08 in 30 days. When the payment arrives, regardless of the current market rate, they convert their euros and receive exactly $54,000. This ensures their financial projections hold true and brings predictability to their international operations.

Section 3: Beyond Transactions - Cultivating a Strategic Banking Relationship

Too many founders view their bank as a simple utility for sending and receiving money. This transactional relationship leaves value on the table. As you scale, your bank can and should become a strategic partner, but this requires cultivation. Moving from a transactional account to a strategic partnership can unlock better support, faster access to credit, and lower fees. Building banking relationships is a proactive endeavor.

Your primary contact for this is your relationship manager (RM). Their job is to be your advocate within the bank and connect you to the right resources. To make this relationship work, you need to be proactive and strategic in your communications.

• Communicate Your Plans: Do not wait until you desperately need something. Schedule regular check-ins to share your business plan, fundraising updates, and even your 13-week cash forecast with your RM. This builds trust and gives them the context to help you effectively when a need arises. Information transforms you from an account number into a valued partner.
• Ask Strategic Questions: Move beyond operational inquiries like transaction statuses. Ask about their treasury management services, options for venture debt, or support for international trade. Inquire about trends they see in your industry. This shows them you view their expertise as a resource, not just a service.
• Consolidate Your Business: While it is wise to have backup accounts for redundancy, concentrating your primary operating accounts and treasury services with one institution makes you a more valuable client. This gives your RM more internal leverage to advocate on your behalf for better rates, faster service, or preferential terms on new products.

The lesson that emerges across cases we see is that banks respond to information and vision. Consider a Series A biotech startup with significant R&D expenses and a need to purchase expensive lab equipment. By proactively sharing their clinical development timeline and funding roadmap with their RM, they are no longer just an account with a certain balance. The RM now understands their growth trajectory and potential. When the time comes, they are better positioned to help the startup secure equipment financing quickly and on favorable terms, a process that would be much slower for an unknown entity.

Practical Takeaways for Improving Treasury Operations

Improving treasury operations is an iterative process that should match your startup's stage of development. The right approach at pre-seed is different from what is needed at Series B. Your systems should evolve with your business complexity.

• Pre-Seed Stage: Your entire focus is runway. The single most important action is to build and maintain a 13-week cash forecast. Use your QuickBooks and bank data to get a clear, honest handle on your burn rate and cash-out date. Your goal is simply to not run out of money unexpectedly. Forget about optimizing yield; focus on survival and visibility.
• Series A Stage: You have raised capital and likely have a cash buffer of more than three months of operating expenses. Now is the time to implement basic cash reserves strategies. Open an HYSA and move your excess funds there to protect against inflation. If you are starting to hire or sell abroad, open a multi-currency account to streamline payments and collections. Begin building a relationship with your bank's RM by scheduling quarterly check-ins to share your progress.
• Series B Stage: Your scale introduces more complexity. Your international transactions are larger and more frequent, making FX risk a material concern. This is the stage to formalize your hedging policy, using forward contracts for significant payments. Your strategic banking relationship becomes critical for accessing more sophisticated financial products like venture debt or lines of credit to fund growth without diluting equity. Your treasury operations should now be a well-defined system, not an ad-hoc process.

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Frequently Asked Questions

Q: What is the difference between cash flow and profit?
A: Profit, or net income, is an accounting measure of revenue minus expenses over a period. Cash flow is the actual movement of money into and out of your bank account. A startup can be profitable on paper but run out of cash if clients pay slowly, making cash flow management essential for survival.

Q: How often should I update my 13-week cash forecast?
A: For an early-stage startup, your 13-week cash forecast should be updated weekly. This frequency ensures the forecast remains an accurate "early warning system" by incorporating the latest actual cash movements and upcoming payments. As you grow and cash flows stabilize, you might shift to a bi-weekly update cadence.

Q: When should our startup consider hiring a dedicated finance person?
A: This often happens around the Series A or B stage when financial complexity increases significantly. Key triggers include managing a larger team, dealing with international transactions and FX risk, preparing for audits, or needing more sophisticated financial modeling for fundraising and strategic planning.

Q: Are forward contracts the only way to manage foreign exchange risk?
A: No, forward contracts are just one tool. For smaller, less predictable amounts, using a multi-currency account is often more efficient. For more complex needs, businesses may use FX options, which provide the right but not the obligation to exchange currency at a set rate, offering more flexibility than forwards.