Startups Lack Tools to Build, Monetize Cash Reserves

“Every company is wasting money in some way or another, and really that does boil down to the solvency of the company in the long run,” Sam Strasser, CEO at Treasure Financial, told PYMNTS.

On Monday (March 14), the FinTech, which provides B2B cash management solutions, announced a new product that helps businesses to make better use of their idle cash. The company says the solution, dubbed Treasure Cash, will help customers earn 15 times more than they’re likely to be getting from their bank, with 10 times more FDIC insurance.

“We’re doing our best to create essentially a safe haven for a businesses’ cash, designed specifically for small and medium business,” Strasser said.

Having a Reserve Account on Hand

There’s a huge advantage for businesses in having a reserve account on hand, Strasser said. Treasure Financial encourages clients to have at least three months’ cash on hand. The company also suggest that they not let that cash sit idle, but instead put it into something that is going to accrue interest.

“Our whole goal is to help every business increase their bottom line by 15%, just by using the resources within the company,” Strasser said.

Many large corporations get 30% or more of their revenue from their treasury department, Strasser said. Treasure is trying to bring that same offer to small- to medium-sized businesses (SMBs) in an automated way, so that they can think about their cash as a source of meaningful revenue.

“It really is a way to enhance and increase the breadth of that skill set that every [chief financial officer] maintains,” Strasser said.

Making the Best Use of Every Single Dollar

Doing what Treasure does would be a challenge for chief financial officers to orchestrate internally, Strasser said, because building a team large enough would be cost-prohibitive.

As such, Treasure encourages clients to keep their existing bank accounts and simply maximize what they can get there.

“It’s all about what is the highest, best use of every single dollar within your company, and how do you put that to use in a way that does not require additional resources — especially human resources,” Strasser explained.

Maintaining Resilience

Building up a reserve account starts with making a plan and then ramping that up to create the security of having at least three months of cash on hand, but as Strasser said, this is not an overnight process.

The Treasure cash management platform will continue to grow, too. Currently, the company’s technology makes it simple to track cash flow and identify and monetize idle cash with the Treasure Reserve account.

Among Treasure’s current clients are startups as well as midmarket companies, including nonprofits and manufacturing.

“It really comes back to that idea around financial stewardship and giving companies — especially the finance department — the ability to manage their resources in the most responsible way to really maintain that resilience,” Strasser said.