Key Takeaways
A cash position is only as useful as the information that supports it. For every payment received, a finance team needs to know who sent it, why and for what amount.
Better visibility into cash and expected inflows can improve forecasting and help finance teams make more informed working capital decisions.
Real-time visibility, ERP integration and reporting work together. Visibility shows finance teams where cash is: integration connects the systems carrying the information and reporting helps turn it into answers they can act on.
Modernization doesn’t have to happen all at once. It can start with the process costing the business the most time, money or opportunity today.
In our Treasury Management series, RBC speaks with Canadian businesses and the finance specialists who advise them about how money moves through a modernized operation – and what leaders are learning about managing cash flow, risk and payments.
“How much cash do we have right now – and how much of it can we use?”
It’s a straightforward question, but for many finance teams, getting the answer can take much of the day.
Balances may need to be pulled from several bank portals, downloaded in different formats, moved into spreadsheets and checked against what has actually cleared. By the time the work is complete, balances may have already changed.
Working from yesterday’s information can have real consequences. For finance teams, it may mean not investing surplus cash, borrow even though funds are available elsewhere, or delay making purchases because they don’t realize funds are already available.
The evolving payments landscape is changing that equation. Finance teams are gaining access to richer payment data, banking and ERP systems can exchange information more directly and money is increasingly moving beyond traditional business hours. Together, these capabilities help provide a faster, more complete view of cash – giving finance teams more insights into their cash to their advantage.
“That’s where you move treasury from being a backwards-looking function to forward-looking,” says Stephen Miller, VP Working Capital Solutions & Transformation at RBC.
What does it take to know your cash position?
Knowing your cash position takes more than knowing the total at the bottom of the statement. A finance team also needs to understand the story behind every payment that comes in.
“It’s all about who sent the money, why and for what amount,” says Bryan Yeung, Senior Director, Domestic and Emerging Payments at RBC. Until those details are known, cash may be in the account without being available for the business to use.
A payment may stop the clock on days sales outstanding, for example, but until it’s matched to the right invoice and customer, it may not free up the credit or working capital tied to that account.
Miller uses a transportation business to illustrate the impact. A carrier with thousands of business customers extends credit to each of them, up to an agreed limit. Once a customer reaches that limit, no further shipments go out until the account is paid down.
“That customer could have paid, but when you’re receiving thousands of payments, you still have to determine which payment belongs to which client,” Miller says. “Until you’ve applied it to the right account, you can’t reopen that customer’s credit.”
Why is a real-time cash position hard to get?
Getting a current, consolidated view of cash remains difficult when the data finance teams need is spread across banks, payment types and internal systems.
The challenge is particularly evident in one of treasury’s most important responsibilities: forecasting. In the 2026 AFP Treasury Benchmarking Survey, 49 per cent of respondents named cash and liquidity forecasting their most challenging treasury activity, while 63 percent identified it as a top priority.
Part of the difficulty lies in the details attached to each payment. Different payment types carry different levels of information and arrive on different timelines, so the speed of reconciliation can depend partly on how customers choose to pay.
“The question is whether there’s enough information travelling with the payment to allow the finance team to reconcile it and close the books,” Yeung says.
The picture can become more fragmented as it moves through the organization. Companies that work with multiple banks may use multiple digital platforms, each presenting information differently and reporting transactions on different timelines. Internal systems and processes can add further steps, particularly when information needs to be downloaded, transferred or manually entered before it can be reconciled.
“Straight-through processing is typically the north star for companies and banks,” Yeung says. “But when systems aren’t connected, what you can end up with instead is ‘straight-through people’ – information moving from one person to the next before it gets where it needs to go.”
Finance teams may still need to go back to their own books to verify what came in and what went out, adding another step before they have a complete view of their cash.
What does optimized liquidity mean for your business?
Optimized liquidity looks different from one business to another, depending on what the company needs its cash to do.
For one company, that could mean earning yield on surplus cash rather than leaving it idle. For another, it could mean paying down debt. A business with several operating entities may want to use surplus funds in one entity to cover a shortfall in another and avoid an overdraft charge. A growing business may simply need to access its cash sooner to place the next order.
“If there’s uncertainty in terms of when I’m getting my cash, I can’t manage my working capital effectively,” Yeung says.
The ultimate goal is to give companies a clear view of the funds they have and the ability to deploy them where they’re needed. Miller describes this as “providing accessibility and traceability across their cash, so that they can access what they actually have.”
One example of how this can work is cash concentration for a company with multiple entities. A cash concentration solution can consolidate balances so funds can be directed where they’re needed, with entities effectively lending to one another. Miller describes the model as an in-house bank, where a company optimizes its own liquidity rather than having each entity manage its position separately.
The liquidity trio
Building a current, actionable view of cash depends on three capabilities working together: real-time cash visibility, ERP integration and reporting built around the questions the business needs to answer. Each contributes something different – seeing the cash, connecting the systems that carry the information and turning the data into useful insight.
Real-time cash visibility: See your position across banks and currencies
A consolidated view across banks, entities and currencies gives finance teams a stronger understanding of what cash is available across the business – without having to manually assemble the position. But visibility also depends on having enough detail attached to each transaction to know what the cash represents and whether it’s available to use.
Richer payment data is making that transaction-level visibility easier. ISO 20022 allows more structured information to travel with a payment, including remittance details that can make reconciliation faster and more automated.
How information travels with a payment can also affect how quickly it can be reconciled. We explore this further in our article, How Canadian Businesses are Automating Payments and Improving Cash Flow.
Payment timing is changing, too. Canada’s Real-Time Rail will support payments that clear and settle 24/7, with RBC joining in 2027. RBC will also support money movement across the Canada-U.S. border outside local business hours through RBC Clear and City National Bank, helping companies access cash held in one market when an obligation falls due in another.
Learn more about Real-Time Rail and what it means for Canadian businesses
ERP integration: Connect your banking and internal systems
ERP integration allows information to flow between a company’s systems and its bank, rather than relying on files, downloads and manual entry.
Once connected, a company can originate payments from its own system, receive reporting in a format that feeds into the ERP and match incoming payments against invoices without re-keying information. “With an ERP integration in place, I wouldn’t need to download a PDF from my online banking portal and then manually reconcile,” Yeung says.
Integration can also strengthen control. “When we integrate with a client’s ERP, they can maintain one set of controls over who does what, with one log and audit trail to work from,” Miller says. Fewer manual touchpoints mean fewer places where information could be changed, missed or interfered with.
Integration can also give the bank earlier visibility into upcoming obligations. Miller gives the example of an invoice due in 60 days in pounds sterling. With visibility into that upcoming obligation, the bank can suggest a forward contract that fixes the cost rather than having the company hold additional cash against an exchange rate it can’t predict.
Managing currency exposure is another part of putting cash to work effectively. This is explored further in the article, Foreign Exchange Risk Management: What It Takes to Control the Cost of Doing Business Abroad.
Reporting: Turn transaction data into answers
Visibility tells a finance team where its cash is. Effective reporting adds the context needed to understand what’s behind the numbers – who sent a payment, what it relates to and where it should be applied.
Virtual accounts can help provide that context. A company can assign a unique virtual account number to a customer or other remitter, allowing an incoming payment to be identified by that number rather than relying solely on the information the sender includes with the payment.
“If virtual account one belongs to XYZ Corp, when a payment comes into that account, I know exactly who sent it,” Yeung says.
Combined with richer transaction data and ERP integration, virtual accounts can help automate reconciliation and give finance teams a more current view of receivables, available cash and working capital.
The value of reporting also depends on what finance teams can learn from the information. Are customers consistently paying within their payment terms? How predictable are those inflows? Where is surplus cash building up? Better answers help improve forecasting and give finance leaders greater confidence in their cash position – helping them determine what can be invested, used to pay down debt or deployed elsewhere in the business.
AI: Putting connected data to work
As payment, banking and ERP data become more connected, AI can help finance teams interpret that information and act on it more quickly.
Reconciliation is one immediate use case. AI can help identify matches between incoming payments and outstanding invoices, flag exceptions for review and reduce the amount of manual investigation required when the information doesn’t line up perfectly.
AI also does more than identify an issue. Miller points to agentic AI as one example: “It can identify that something needs to be done, determine the next step and potentially take that action based on the policies the company has put in place.”
The same capabilities helps support monitoring and control. AI can continuously assess payment activity and flag transactions that fall outside established patterns, giving finance teams another way to identify unusual activity for review.
Ultimately, AI becomes more useful as the data available to it becomes more complete and connected. Banking and ERP integration, richer payment data and well-defined controls create the foundation for AI to support increasingly sophisticated treasury decisions.
How is AI changing payment fraud?
AI is reshaping both sides of the fraud equation. It is making it easier for fraudsters to create more convincing, scalable attacks on companies of all types and sizes, while also helping to strengthen the tools financial institutions and businesses can use to detect suspicious activity.
More convincing fraud, at greater scale
AI is making fraudulent communications harder to distinguish from legitimate ones – from polished emails and text messages to voice cloning and even video deepfakes.
Getting a call from someone who sounds exactly like a trusted banking contact – but isn’t – is now entirely possible, says Eric Yu, Senior Director, Commercial Fraud Strategy at RBC. AI also allows scammers to automate and repeat attacks at scale, without a person having to place every call or craft every message.
Smarter fraud detection
As cyber threats evolve and attacks become faster and increasingly automated, artificial intelligence and machine learning are becoming essential to effective fraud prevention. RBC is strategically investing in advanced AI and machine learning capabilities to stay ahead of these emerging threats and better protect our clients.
Technology is one layer of defence, and AI is making that layer stronger. Still, businesses and finance teams should continue to use preventative measures and strong verification practices to help protect against fraud. One simple step is to call your executive or your third-party supplier through a trusted phone number if you receive instructions to change an account number or expedite a payment.
How can finance teams start optimizing liquidity and working capital?
Optimizing liquidity doesn’t require a company to overhaul its treasury operations all at once. A practical place to start is with the processes creating the most friction for the finance team.
Yeung suggests looking at where people spend time tracking down information, reconciling transactions or moving data manually between systems. “Where is the pain? Where are the people spending their time? That’s often where you can start,” he says.
For some companies, the first step may be moving a paper-based payment or collection process to an electronic one. From there, information can flow more directly into internal systems, creating opportunities to automate reconciliation, improve reporting and reduce manual intervention.
Integration does require investment. Connecting banking and ERP systems may involve technology costs, data mapping and change management, particularly for companies with complex or long-established processes. The potential return, however, extends beyond the time saved on an individual task.
Miller describes the benefits as compounding. As information moves faster and manual work falls away, finance teams can spend less time assembling a view of what has already happened and more time looking ahead. Each improvement can also create a stronger foundation for the next – from digitized payments to integrated systems and increasingly automated processes.
How optimized is your current liquidity position?
Ask these six questions to identify where greater visibility, automation or integration could have the biggest impact:
Can you see your cash position across banks, entities and currencies without manually assembling the information?
How quickly can your team identify an incoming payment and apply it to the right customer and invoice?
Does banking information flow directly into your ERP, or does someone still need to download, upload or re-enter it?
Can you identify surplus cash – and access it where it’s needed – in time to put it to work?
How much of your team’s time is spent reconciling transactions, investigating exceptions or tracking down information?
Do you have the information you need to forecast cash flow and make timely decisions about debt, investment, purchasing or other uses of cash?
Build your liquidity and working capital strategy over time
A company still relying on manual treasury processes has different priorities from one with real-time visibility and integrated systems. As these capabilities advance, so do the opportunities to automate processes, access cash sooner and manage working capital more effectively.
The right step will depend on where your company is today – from digitizing manual processes and connecting banking and ERP systems to improving real-time visibility and exploring more advanced capabilities.
Turn cash visibility into a strategic advantage
Your business’s cash position is only as useful as the information that supports it. RBC can help you identify opportunities to strengthen how you manage liquidity and working capital, with additional solutions that evolve as your needs become more sophisticated.
Talk to your RBC Relationship Manager
Visit the Payment and Cash Management Solutions page for payment tools and solutions.
Frequently asked questions (FAQs) about liquidity and working capital optimization
Better visibility helps finance teams understand how much cash is available, where it is and when more is expected to arrive. In turn, this can support more accurate forecasting and help companies make better use of working capital – whether by investing surplus cash, paying down debt, funding purchases or deploying it elsewhere in the business.
Companies can start by identifying where manual processes, fragmented information or disconnected systems are making it difficult to see or access cash. Depending on the business, improvements may include digitizing payments and collections, integrating banking and ERP systems, consolidating cash across entities and improving transaction reporting.
Connecting banking and ERP systems allows payment and account information to flow more directly between them. This can reduce manual reconciliation, provide more timely information, strengthen controls and help finance teams maintain a more current view of cash and working capital.
Real-time data provides more timely information about balances, transactions and incoming payments, which can give finance teams a stronger basis for forecasting cash flow. Greater predictability can also help finance teams determine when surplus cash can be invested, used to reduce debt or put to work elsewhere.
Companies should start with the areas creating the most friction today. That could mean a manual reconciliation process, limited visibility across accounts or entities, disconnected banking and ERP systems or delays in identifying incoming payments. Where to begin depends on the company’s current capabilities, priorities and broader working capital needs.
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.
