We are living through a period of enhanced uncertainty, and that has consequences for international trade and trade finance.
For corporate treasuries and banks, cash is a strategic asset that can be monetized more effectively. Supply chain finance (SCF) and working capital can and should be linked more effectively, and integrated data is one way this can be achieved.
With real-time enterprise supply chain data — such as inventory positions, shipment ETAs, and supplier statuses — plugged into treasury systems, proactive corporate CFOs and treasurers can radically upgrade their working capital strategies.
The advantages are more accurate liquidity insights (useful with the Basel III roll-out underway), unlock trapped capital, and dynamic risk-adjust payment terms that will reduce finance costs and improve resilience.
In this article, we explore how bridging this gap can empower treasury teams to act on evolving supply chain realities more quickly — and why the future of working capital optimization depends on it.
The Treasury–Supply Chain Divide: A Legacy Bottleneck
In most cases, treasury and supply chain functions have occupied different orbits within enterprise-size organizations. Treasury teams focus on managing liquidity, funding, and financial risk.
On the other hand, supply chain financial managers handle procurement, inventory, and supplier performance. Despite their interdependence, these teams rarely operate from a shared data environment or strategic playbook.
This creates a disconnect, and this causes inefficiencies in working capital management. Treasury often relies on outdated or static supply chain data for cash forecasting and liquidity planning. At the same time and in a different silo, supply chain teams may optimize for availability and lead times without visibility into the organization’s cost of capital or payment cycle flexibility.
As a result, enterprise corps regularly hold excess inventory, maintain redundant buffers, or over-rely on short-term borrowing. According to J. P. Morgan’s Working Capital Index (WCI), 1500 U.S. S&P “companies reported near-record working capital levels, with about $707 billion of trapped liquidity, up 40% from pre-pandemic levels.”
The Rise of Supply Chain Finance 2.0
Traditional supply chain finance (SCF) focused on extending supplier payment terms while offering early payment through banks or third parties. But this model often lacked real-time coordination between supply chain events and treasury decisions.
Enter Supply Chain Finance 2.0. In this evolved model, corporates can use digitized trade documents, shipment tracking data, and ERP integrations to align financing directly with the physical flow of goods. Real-time visibility into supply chain events enables treasury teams to proactively fund early payments, adjust credit lines, or hedge exposures.
SCF 2.0 isn’t just about better financing — it’s about smarter, data-led liquidity orchestration. The global SCF market is now worth over $2 trillion, with usage growing at a 7% annual rate.
Asset managers and non-bank financial institutions are increasingly entering this high-growth sector, drawn by low-risk, short-duration assets and the appeal of digitized trade receivables.
What Real-Time Supply Chain Data Brings to Treasury
Integrating supply chain data into treasury systems gives finance leaders a crucial time advantage. Instead of waiting for month-end reconciliation or supplier invoices, the treasury can react to operational data as it happens.
Here are three ways this can be done:
1. Inventory movements
Knowing where stock is in the supply chain — whether it’s raw materials, in transit, or finished goods — improves forecasting accuracy for finance teams, and for risk-adjusted assessments. Treasury can match cash outflows to inbound inventory arrivals, optimizing the timing of payments and borrowing needs.
2. Shipment ETAs
For SMEs reliant on SCF (and, therefore, corporates extending these financial vehicles), logistics data offers forward visibility into when inventory will arrive and when goods can be invoiced.
For example, if a key shipment is delayed, treasury can preemptively adjust cash flow projections or extend payment terms with impacted suppliers.
3. Supplier status
If a strategic supplier is facing liquidity stress, treasury can offer early payment or SCF to stabilize them — avoiding a costly disruption. At the same time, financially robust suppliers might benefit from dynamic discounting based on their own preferences or financing needs.
With tools like LiquidX’s Digitize and TradeHub platforms, organizations are already aggregating this data in real time, providing a unified view of trade flows, payment terms, and financing options.
Reducing Financing Costs and Unlocking Trapped Liquidity
Excess working capital (non-banking U.S. corporates are currently sitting on $6.9 trillion) — whether in inventory, payables, or receivables — is a silent killer of enterprise value. It ties up funds that could be generating better returns or reducing debt. In most cases, shareholders prefer corporations to get better returns, and supply chain finance is one method to achieve this.
Digitally connecting treasury and supply chain systems helps to unlock and produce enhanced value from this trapped liquidity. For example:
- Accounts receivable financing: Once supply chain events like shipment delivery or invoice confirmation are tracked in real time, receivables can be financed almost instantly.
- Early pay programs: By integrating logistics triggers (like proof of delivery), companies can safely release early payments, often financed by third parties or treasury surplus.
- Risk-adjusted funding rates: Real-time supplier performance and delivery history can be used to assess counterparty risk — enabling more competitive financing structures.
The result of this for corporations? Lower dependency on short-term borrowing, reduced working capital requirements, and a more resilient balance sheet.
Implementing an Integrated Strategy: Technology and Governance
Connecting supply chain and treasury data requires more than spreadsheets and the occasional Zoom or Teams call. It requires a robust digital infrastructure and a shift in mindset within multi-functional financial teams.
Here are some of the most important factors:
- ERP and API integration: Real-time data exchange between treasury platforms and supply chain systems like SAP, Oracle, or NetSuite.
- Trade digitization platforms: SaaS-based solutions like LiquidX digitize trade documents (e.g., invoices, purchase orders, shipping data, insurance, etc.) and automate matching and reconciliation.
- Governance models: Cross-functional teams can bring together treasury, procurement, and IT to define ownership and control models that are compliant and flexible to shifting demands.
For financial institutions, this shift opens up new services and products. Banks and asset managers can offer working capital solutions that are tailored, dynamic, and integrated into corporate real-time financial and data flows.
Use Cases: Strategic Benefits in Action
When treasury and supply chain teams collaborate around shared data, the benefits are measurable and strategic:
- Cash Conversion Cycle (CCC) Optimization: With an alignment between payments and receivables with physical flows, corporates can shorten their cash conversion cycles, which is better for cash flow management.
- Financing cost reduction: Leveraging early payment programs and receivables finance reduces reliance on high-cost debt. This is especially useful in more uncertain economic times.
- Supplier resilience: Providing flexible terms or early pay options enhances supplier stability, especially during disruption.
- Risk visibility: Real-time data allows the treasury to detect and respond to supplier risk faster (like a supplier in financial distress) — protecting operations and reputation.
Making SCF & Trade Finance More Resilient
One of the challenges is that supply chain finance and corporate working capital are still stuck in manual and outdated ways of working.
- Paper invoices.
- Excel spreadsheets.
- Even faxes.
Moving corporates, banks, and asset managers away from these manual processes and into digital ones would save a lot of money and make trade finance transactions more robust, resilient, and secure.
AI integration within SCF and other trade finance systems is no longer a nice-to-have; it’s mission-critical.
As our CRO, Dominic Capolongo, said in Finance Derivative:
“The key advantage lies in AI’s pattern recognition capabilities. Rather than relying on fixed rules, machine learning models can identify complex relationships between different data elements.”
“When a buyer truncates an invoice reference or applies an unexpected discount, AI can still identify the correct match by recognising patterns in the remaining data points. This capability proves invaluable when reconciling transactions affected by tariff-related adjustments or partial payments.”
AI Improving Supply Chain Finance & Working Capital Management
The benefits of AI-powered working capital optimization extend well beyond operational efficiency in corporate treasury operations.
Companies implementing these systems report significant improvements across multiple performance dimensions. Cash conversion cycles substantially decrease, while supplier payment accuracy dramatically increases – these efficiency gains enable treasury teams to optimize liquidity positions without corresponding increases in manual oversight.
What makes AI systems unique in SCF is the ability to continuously improve through exposure to new transaction data. Every successfully processed invoice, payment authorization, and supplier financing arrangement enhances the system’s predictive analytics accuracy.
This creates a virtuous cycle of working capital optimization. Having a self-optimizing quality is especially valuable in today’s volatile supply chain environment, where supplier payment terms and financing requirements evolve constantly in response to shifting market conditions, commodity prices, and regulatory changes affecting trade finance programs.
Conclusion: The Future of Working Capital is Connected
Economically speaking, it feels like uncertainty is the only constant, even for multi-billion-dollar corporations and SMEs in their supply chain. Eliminating the inefficiencies caused by disconnected supply chain and treasury systems would reduce uncertainties for every party involved and unlock new growth opportunities.
This can be done through the integration of real-time supply chain data into treasury decision-making. Businesses can unlock trapped liquidity, dynamically optimize payment terms, and reduce financing costs — while strengthening supplier networks and improving resilience.
Trade finance professionals and asset managers should take note: the future of working capital is in new funding sources and smarter, connected data ecosystems. Those who act now will lead the next wave of financial efficiency and strategic advantage.
For corporates wanting to leverage the advantage of a connected SCF and working capital program, digitization is the only way forward, and that means using cutting-edge solutions like LiquidX that can:
- Upload any kind of document.
- Handle every type of data, and;
- Communicate (e.g., originate, distribute, buy, and sell) with systems that other players in the industry are using.
Until you go digital, you can’t take advantage of automation and AI in supply chain finance.
Here’s another great reason to work with us! In 2024, Global Business & Finance Magazine awarded LiquidX with three awards for the second year in a row:
- Best Digital Solutions For Global Trade, United States 2025
- Best Technology Vendor Of The Year, United States 2025
- Best Fintech For Trade, United States 2025
Corporations, banks, and asset managers: To request a demo of our trade finance distribution solutions, click here.
