Editor's note: Zac Nesper's 20 years at HP included stints in FP&A and multiple treasury roles before he served as treasurer for five years. He led HP's treasury separation into two companies large enough for the Fortune 50, dealt with fallout from the pandemic, and helped defeat a hostile takeover attempt by Carl Icahn. His other articles on managing treasury through a strategic lens focus on FX risk management , working capital management , treasury talent and a two-part look at capital structure .
In part one , I wrote that cash management is the foundation the rest of treasury stands on, and the part most likely to be taken for granted. Most treasurers inherit the daily machinery of cash rather than design it, one reason there is often plenty of room for improvement. At HP, treasury self-funded a transformation that ended up delivering more than double the $150 million net present value we estimated at the outset.
Last week’s article provided six questions and pro tips on visibility, forecasting and cash intelligence as well as the plumbing necessary for structural efficiency. Here are four more strategic cash and liquidity questions for CFOs, treasurer and boards.
Funding, Deployment & Investment 7. How much of our offshore cash is genuinely trapped, what would it cost to bring home, and are we working the problem with tax and legal rather than around them? Pro tip: Between dividends, intercompany loans and royalty flows, and after the 2017 shift in U.S. tax law, most trapped cash has a path home at a knowable cost; treasurers routinely overestimate how trapped it really is. Tax wants certainty and a low effective tax rate, legal wants protection and treasury wants the cash. The best treasurers treat tax and legal as partners on the path rather than barricades; cash is rarely trapped so much as waiting for the right structure and the right relationships. Maintain a living repatriation road map rather than building one under duress: Move forward entity by entity, with the cost of each path articulated and the factors that could change the outcome enumerated and delegated to owners. We worked restricted cash down deliberately, extracting nearly $1 billion in about a year, at exactly the moment leverage was elevated and cash flow was constrained. If offshore cash is earning money market yields while the parent borrows term debt, that is a negative-carry position dressed up as conservatism.
8. Does our investment policy put safety and liquidity ahead of yield, and is the portfolio segmented so each dollar is invested to its true horizon? Pro tip: Prioritizing is the policy: Segment the portfolio into operating, reserve and strategic cash; invest each bucket with a time horizon reflecting when it’s truly needed; enforce counterparty and concentration limits. When Silicon Valley Bank failed in 2023, one technology company disclosed that nearly $500 million, roughly a quarter of its cash, was sitting at that single institution. Concentration limits exist for exactly that kind of event. Write the policy to give the treasury team enough flexibility to optimize as markets move, inside robust controls and guardrails agreed upon with the CFO and the board. That alignment protects more than principal: A policy everyone understands up front removes the misunderstandings that cost companies cash and treasurers careers. Resist reaching for yield: The extra basis points are never remembered and a frozen fund or counterparty loss is never forgotten. The durable way to earn more is structural: turning uninvested cash into invested cash, or raising yield on what is already deployed. More creatively, we deployed a portion of our cash into supplier early-pay programs, more than doubling the yield on those dollars with counterparties we already understood: our own suppliers.
Governance, Controls & Fraud
9. Would our payment controls hold up against a determined fraudster, and are they as strong in our smallest subsidiary as they are at headquarters? Pro tip: Cash is where fraud happens, and a payment is the moment of no return. Standardize flows through a payment factory with on-behalf-of structures (POBO for payments, COBO for collections) so every entity inherits the same controls: dual authorization, segregation of duties, sanctions and watchlist screening, and out-of-band callback verification on any change of payment instructions. In many business email compromise schemes, fraudsters manipulate payment instructions before a payment is initiated, rather than compromising the payment system itself. The consequences are not hypothetical: An Austrian aerospace supplier lost nearly $50 million to emails impersonating its CEO, and the supervisory board fired both the CEO and the CFO. Cash and careers went out the same door. Fraudsters attack the weakest entity in the group, so uniformity matters. Signatory hygiene belongs in the same discipline: Every signer who changed roles or left years ago is an open door, so keep signatories to a minimum and review them on a cadence. Then test them the way an attacker would.
Technology, Data & the Future
10. Is our treasury technology a single source of truth, and is our operating model ready for money that moves around the clock? Pro tip: A TMS should be the system of record for cash, connected to your banks through standardized channels, SWIFT or APIs as each bank best supports, so balances and transactions flow straight through without rekeying and without rogue spreadsheets accumulating in the gaps. We went live on SAP S/4HANA for treasury in 2020. AI is already improving forecasting and anomaly detection, and instant payment rails and stablecoins are making money move at all hours, which collapses float and demands a control framework built for continuous operation and not limited by banking hours. Teams that build clean, structured, centralized data will find each wave of technology an accelerant; teams that skip that work will find the same waves overwhelming.
Little of this work is glamorous and none of it is optional. Cash management compounds: Each element makes the others more valuable and done well the work funds itself many times over. The treasurer with this machinery in place spends a downturn executing a plan. The one without it spends the downturn looking for the cash.
