In a multinational environment, treasury teams often operate across dozens of entities, selling in multiple currencies, sourcing materials globally, and managing constant flows between accounts. The role is simple on paper: ensure the organisation always has the right amount of the right currency, in the right account, at the right time, without paying more than necessary.
In practice? Exchange rates shift unpredictably, large payments can surface in forecasts at the last minute, and reconciling ERP data with bank statements can take hours.
The challenge is to build an FX strategy that reduces risk, speeds up forecasting, and builds trust in every decision.
Why FX Is More Than Just the Rate
FX touches nearly every aspect of treasury work:
Paying suppliers across continents
Managing inter-company loans
Avoiding overdrafts and threshold breaches
Funding regional operations
Two main priorities drive the strategy:
Operational FX → ensuring liquidity in the right currency and account while avoiding unnecessary bank fees.
Strategic FX → minimising exposure with well-timed hedges and scenario planning.
Without timely, transparent forecasts, both are harder to achieve.
The “Wait and See” Trap
For many treasury teams, the default FX approach is simple: wait until a payment is due, then make the trade. On the surface, it feels safe, no early conversions, no unnecessary exposure. But in volatile markets, that “safe” approach can be the most dangerous.
Picture this: it’s Thursday afternoon, and the team is preparing to fund a large supplier payment. The forecast shows the payment comfortably covered. But overnight, the currency shifts sharply. By Friday morning, the cost to make that same payment has jumped by six figures.
The problem wasn’t just the market move, it was that the team didn’t see it coming. With ERP data extractions taking hours and reconciliations lagging behind, the forecast was always one step too slow. The result? Missed opportunities to lock in favourable rates and a costly reminder that timing in FX is everything.
The Overtrading Problem
At the other end of the spectrum lies the overtrading trap. Determined to avoid nasty surprises, some teams adopt a “trade early and trade often” philosophy. On paper, it keeps liquidity in the right currency and reduces last-minute scrambles. In practice, it can quietly drain value from the business.
Frequent conversions rack up bank fees, increase operational workload, and add complexity to cash positioning. Without a quick, reliable way to compare trading scenario, like the difference between weekly and monthly trades, teams are left making decisions in the dark.
It’s a little like checking the weather every hour and changing your outfit each time, you’re busy, but you’re not necessarily better prepared.
The Hedging Dilemma
Hedging is supposed to be the safety net, a way to protect against unfavourable moves and bring predictability to planning. But a hedge is only as effective as the forecast it’s based on.
Without early visibility into large, unbooked payments or the flexibility to adjust forecasts for sudden, high-impact events like tax payments or unexpected supplier requests, hedges can miss their mark. Instead of locking in savings, the team can end up over-hedged, under-hedged, or committed to rates that no longer make sense.
It’s not that hedging doesn’t work, it’s that hedging without foresight is like buying insurance for the wrong house. You’re paying for protection, but it’s not where you need it most.
From Reaction to Precision
A shift from reactive processes to precision forecasting means:
→ Faster reconciliation through bank statement ingestion and quick ERP syncs.
→ Early payment detection for large, unbooked transactions.
→ Transparency via clear breakdowns of data sources and explainable machine learning assumptions.
→ Variance analysis to explain deviations and build trust.
→ Better visibility with improved forecast visualisations and embeddable dashboards.
→ Proactive alerts for overdrafts, threshold breaches, and currency surpluses.
→ Reduced manual burden with batch uploads (coming) and quick manual one-offs.
The Impact of Forward-Looking FX
Within months, teams adopting this approach have seen:
Lower FX trading costs through better timing.
Zero urgent conversions for three consecutive quarters.
Minutes instead of hours for forecast updates.
Stakeholder confidence restored through explainable variances.
Markets will always move. But with a forecasting process that’s fast, transparent, and trusted, treasury teams can act at the right time, in the right way, consistently.
