When Treasury isn't a nice-to-have?

At what point does a Treasury function move from a nice to have to a critical function in a well functioning company?

As I speak with growing companies in the Baltics, the question of whether a company is “big enough” for Treasury comes up surprisingly often. And I understand why. We do not have many multinationals in the region, and Treasury is still sometimes seen as something you build once you are already complex and international.

At the same time, during the first Baltic Treasury Conference in September, several speakers mentioned that, looking back, they would have started building the function and implementing specialist systems earlier, when the organisation was smaller and the setup would have been simpler.

But if some feel they were “late”, and others feel they are “early”, then what is the right time?

Coincidentally, I realised while writing this that the evolution of Treasury processes was also the topic of my presentation at the first Baltic Treasury event hosted by Vinted at the end of 2024. It was also where I met the first Baltrea Advisory Group members, and where the journey towards creating an Association started to feel much more real.

My view is that Treasury does not appear as a single moment or a single hire. Treasury processes evolve as the company grows, and the question is less “do we need Treasury” and more “which Treasury problems are we already facing, and who owns them”.

Treasury is already there, it is just scattered

One of the simplest ways I have found to explain Treasury is this: Treasury does not suddenly arrive one day as a fully formed department with policies, systems, and a specialist hire. Treasury is already there from day one. It is just scattered, implicit, and usually owned by whoever has the time and the bank token.

In the startup stage, the whole point of the company is to get the product and the business model right, so Treasury is mostly invisible. Bank accounts exist because they must. Cash comes in, bills get paid, someone occasionally worries about exchange rates, and then everyone goes back to building the business. Founders will perform some Treasury tasks (opening a bank account is unavoidable), but there is neither the time nor the need to focus on “Treasury” as a function. They will likely not even call it one.

The shift starts in the growth stage, because growth has a habit of creating complexity faster than people expect. You scale and expand, you establish your products, and Treasury processes begin to appear. But they are not necessarily performed by “Treasury”. They sit with founders, a finance director, accountants, whoever is closest to the problem.

The real challenge here is not only what people do, but how they do it, and what they do not think about at all. Processes are scattered across the organisation, ownership is unclear, and visibility over cash and risk is partial.

If you want a practical definition of “big enough for Treasury”, it is often when scattered Treasury processes start creating real cost. Not always a single dramatic event, but a steady accumulation: inconsistent ways of managing liquidity, fragmented bank account landscape, ad hoc decisions about FX, funding or collections, and no one who can confidently answer a simple question like “what is our real liquidity position if things go wrong”.

At this stage, certain topics become non optional in practice, even if no one labels them as Treasury yet: cash flow management, bank account management, FX exposures, sometimes external funding, and the way the business collects cash.

When it becomes critical: the quiet existential risk moment

There is a moment I often come back to, because it illustrates how quickly Treasury risk can become existential without anyone noticing until it is too late.

As a somewhat drastic example, I once spoke with a furniture EUR-based manufacturer selling a large share of its production into the UK. Six months after the Brexit referendum I asked what they were doing about GBP exposure. The answer was blunt: they used to hedge, they saw losses, they stopped. They increased prices twice. They know the FX rate where they break even, and if the rate does not get there, the owner said he might as well close the business.

For me, that is an unequivocal point where Treasury stops being a theoretical nice to have and becomes part of business continuity. Not because every company must hedge everything, but because the company must at least understand what its risks are, how they behave, and what choices exist. A Treasury lens helps the business make those choices deliberately, rather than accidentally.

Consolidation: Treasury becomes a function

Then comes the maturity stage. The company stabilises and starts actively looking for operational efficiencies. This is typically where you see Treasury processes being consolidated into a Treasury department, usually reporting to the CFO, because structure becomes a tool for efficiency and control rather than bureaucracy.

This is also where centralisation starts to matter. When each local entity runs semi autonomously, there is a strong pull towards local optimisation in banking and liquidity. But from a group perspective, too much local freedom often means duplicated bank relationships, too many accounts, inconsistent controls, and decisions that make sense locally but not for the group. Consolidating Treasury processes to the extent possible is often what creates efficiency and improves decision quality.

Expansion changes the game again

After maturity, growth does not become simpler, it becomes broader.

In the expansion or diversification stage, the company moves into new markets or new products, either organically or through acquisitions. Organic growth might create exposures you have never managed before. Inorganic growth often means you inherit another Treasury setup, new accounts, new banks, sometimes even another Treasury team, and your challenge becomes integration as much as execution.

This is where the earlier question comes back in a different form. Even if you have Treasury on the org chart now, are you equipped for what the next stage demands?

The stages you do not plan for, but Treasury must

There are also stages where the value of Treasury becomes obvious in the least pleasant way.

In decline or renewal, Treasury often turns into the guardian of cash and, in many cases, the face to the market. The work shifts towards preserving liquidity, enforcing discipline, and supporting restructuring, divestitures, and other actions required to keep the business afloat.

In an exit or transformation scenario, Treasury becomes strategic again, but in a very specific, high scrutiny way. IPO preparation, refinancing for a change of ownership, maximising value for shareholders, and easing the transition can rely heavily on specialised Treasury expertise.

Skill sets do not scale automatically

One thing that tends to be underestimated is that different stages require different skills. A Treasury setup that works well in growth may not work in maturity. A strong cash and banking person may not be the right person to lead an IPO readiness process. And even a solid team may not have the niche expertise that suddenly becomes essential.

That is why the question is not only when do we hire, but also how do we fill gaps. Sometimes you hire full time. Sometimes you bring in specialist support in a project format, precisely because Treasury teams are typically lean and certain needs are stage specific.

So when is the right time?

If I go back to the original question, when does Treasury move from nice to have to critical, my answer is: usually earlier than companies expect.

Treasury becomes critical when growth creates exposures and complexity that the business is already carrying, even if it does not label them as Treasury yet. When bank accounts multiply, when liquidity visibility becomes fragmented, when FX exposure becomes material, when funding discussions become real, and when decisions are made locally without a group view, that is already Treasury territory.

At that point the risk is not “we do not have a Treasury department”. The risk is that no one owns Treasury outcomes consistently.

This is also why I care about the Baltic Treasury community developing. Part of the reason we keep reinventing the wheel one company at a time is that Treasury can still be a lonely profession in the region. The Association gives us a place to belong, to compare notes, and to learn faster from each other’s mistakes and successes.