How Modern Treasuries Put Cash to Work

For years, low interest rates meant little reason to actively manage surplus cash. Leaving money idle was almost cost-free. But with today’s higher rates, tighter funding, and frequent market shocks, treasury investment is back on the agenda.

Corporate treasuries are adjusting: cash allocations by U.S. corporations have dropped from 40% to 20% since 2021, with more moving into money market funds and short-term treasuries (Reuters). That followed a pandemic-era peak, when cash-to-assets ratios climbed above 20% for the median and 30% on average (Federal Reserve).

Excess cash isn’t just a safety net — it’s a lever for growth. Without clear management, companies risk missing out on returns and taking on unnecessary risk. We explored this in our post on liquidity planning— and it’s just as relevant here. Customers like GetYourGuide and Tide show how better visibility and control help treasury teams put idle balances to work.

Why excess cash builds up as companies scale

For fast-growing companies, cash surpluses often accumulate for structural reasons: delayed acquisitions, slower hiring than forecasted, or operational efficiency gains. What begins as “dry powder” for growth can quickly become a significant idle balance.

By the end of 2024, corporates were estimated to hold around $2.1 trillion in excess cash, with a quarter of that concentrated in just ten firms (Edward Conard). For everyone else, the challenge is making sure surplus cash doesn’t sit idle, slowly eroded by inflation or rising funding costs. This makes clear policies essential: surplus funds need to be managed so liquidity is preserved while returns are optimised.

Balancing liquidity, risk, and return

Investment management in treasury is ultimately about trade-offs:

• Liquidity: How quickly might you need the money? Segmenting cash into operational, reserve, and strategic buckets helps match investment horizons to liquidity needs.
• Risk: Diversification across banks, maturities, and instruments reduces exposure to market or bank-specific shocks. Recent bank failures underline why this matters.
• Return: Even short-term, low-risk investments can now generate meaningful yield. Mercer Capital notes that high interest rates in 2024 let firms grow cash reserves while boosting earnings (Mercer Capital).

The best treasury teams are adopting a portfolio mindset: treating excess cash like an asset that requires active management, not just storage.

Best practices for managing surplus cash

Modern treasuries are putting structure around how they invest:

• Segment cash into what must stay available and what can be invested.
• Write clear policies that balance yield, liquidity, and risk.
• Automate execution and reporting to cut manual effort and errors.
• Use platforms for direct access to leading investment products.

It’s often the basics — clear policies and good visibility — that make the biggest difference.

The role of technology

This is where modern platforms make a difference. With Atlar’s new investment management solution, finance teams can access institutional money market funds from providers like GS Mosaic, Morgan Money, ICD, and TreasurySpring directly through the platform.

Our recent partnership with TreasurySpring, in particular, opens access to Fixed-Term Funds across multiple asset classes and counterparties. Combined with real-time bank connectivity and streamlined reconciliation, treasurers can invest surplus cash while keeping control over liquidity.

Companies like Beamery, for example, use Atlar to maintain global visibility as they scale, while Mangopay relies on it for diversified treasury operations across its network.

A new era for treasury investment management

In a world where rates, liquidity, and market stability can shift quickly, leaving cash idle isn’t an option. Structured policies, cash segmentation, and the right technology turn surplus into resilience.

For fast-growing companies, this is part of a bigger story: treasury moving from back office to strategic driver. With possible rate cuts or fresh volatility ahead, the priority is clear: prepare now to make the most of your cash.