EuroFinance

Managing working capital has become one of the toughest challenges for treasury in today’s world of high interest rates, inflation, and geopolitical disruptions. Companies are not only focused on improving liquidity but also on preserving supply chain resilience, maintaining strong trade relationships and operating their business effectively, by investing the right amount of working capital in their operations to support the growth of their organisations

Michael Ben Moshe, VP and head of global working capital and cash optimisation at Teva Pharmaceuticals, an innovative biopharmaceutical company, enabled by a world-class generics business, and Carol Thurnheer, senior manager international treasury for the Americas and M&A at Haleon, a consumer health company, shared their perspectives on the new pressures facing working capital and the evolving role of treasury.

The challenge of today’s environment

Ben Moshe pointed out that “companies don’t realise that high interest rates are here to stay and continue to finance themselves externally. Some think it’s a temporary phenomenon and wait for rates to go back to zero as they were a few years ago for more than 12 years.” And some simply do not have the knowledge or the influence for optimising their operations and internal capital allocation.

He described how this shift has created “a working capital battle between companies who realize that cost of capital has increased dramatically, which triggers them to focus on unlocking capital that is trapped in their operations,” with negotiations not only on price of goods or payment terms but also on supply chains efficiency and cycle times. “In some cases, improving working capital is a zero-sum game and might come at the expense of the counterparty,” he said, making it a central tension in trade relationships.

Carol Thurnheer agreed and highlighted that large companies must act responsibly when negotiating: “Smaller suppliers don’t have the same leverage than big corporations. If big corporations lose a strategic partner, it can negatively impact them.” For her, supply chain resilience is closely tied to fairness in how terms are managed.

Balancing cash and protecting relationships

On the question of how treasurers can balance receivables, payables, and inventory while protecting relationships, Carol Thurnheer said it depends on financing tools. “Every term extension that impacts stakeholders needs to be viewed from both sides. On the supplier side, supply chain financing arrangements can be offered, provided they are negotiated at favourable costs and terms.”

She also described how Haleon approached customers when reducing early payment discounts: “We didn’t simply demand new terms and leave the negative impact for others to handle. Instead, we thoughtfully assessed the benefits and costs for both parties and reached a compromise, always prioritising the goal of maintaining a strong relationship.”

Ben Moshe agreed and added that he has seen two approaches: some treasurers improve liquidity mainly through financial instruments, while others first ensure competitive trading terms. “The best companies chase for competitive terms first, then deploy solutions surgically to create maximum effect and optimize financing costs,” he said.

Previously, when interest rates were at zero, some companies were willing to accept off market payment terms in order to stimulate sales, since external funding was both readily available and inexpensive for their business needs. Those companies are finding it hard now to go back. He also stressed the imbalance in negotiations: “Especially for giant companies, we need to understand that while we ask for better terms, we must support our counterparts with solutions such as supply chain finance.”

Both discussed the growing importance of what Ben Moshe called the “supply chain triangle” of sales, profitability, and cash. For years, he noted, “the cash part was sacrificed. Now everybody cares, but the muscles are not trained.” Carol Thurnheer added that this dimension is “often not quantified. Programs are launched across regions without being properly measured or aligned with KPIs.”

For Ben Moshe, treasury must act as a bridge: “Our job is to translate operations into financial terms, to connect the language of supply chain and procurement with the financial language to ultimately make effective decision that ultimately balance the triangle”

The expanding role of treasury

The role of treasury is becoming more embedded in supply chain strategy. At Teva, Ben Moshe pushed for the treasury to join Sales & Operations Planning forums: “These decisions influence cash, but finance was not present to explain the outcomes. Now we are at the table, bringing the cash agenda into the discussion and enabling better trade-off decisions with our colleagues”

He explained that this also changes how the treasury thinks about forecasting: “Most treasury forecast cash with open invoices and transactions. But once you realise the aim is not just to forecast, but to influence the organisation to optimise performance, a lot of value is realised.”

Innovation and partnerships

In the future, Carol Thurnheer sees the biggest unlock in trade finance digitisation. “In markets such as Africa for example, much of trade finance remains paper-based. As a large organisation, we would struggle to manage the logistics of shipping documents worldwide. Banks and international financial institutions need to follow through on their commitments to digitalisation to unlock value in emerging markets.”

Ben Moshe agreed that financial instruments are becoming more sophisticated, but highlighted a gap within corporates: “Most large companies have fragmented systems. Procurement has its systems, supply chain has theirs, but at the corporate level you don’t have one picture of procure-to-pay, order-to-cash, and inventory cycles.”

To address this, Teva developed its own tools. “You need to break working capital targets down as small as possible, to the lowest levels. One team works on payment terms, another on securitisation, another on vendor inventory. Once you get to that level of visibility, you know you’re on the right path.”

Conclusion

Both experts agreed that the role of treasury has shifted dramatically. Working capital management is now at the center of corporate strategy, shaped by high rates, inflation, and fragile supply chains. Treasurers must balance cash efficiency with fairness, embed themselves in operational decision-making, and push for innovation both externally with banks and internally within their organisations.

As Ben Moshe put it, treasury must act as “a catalyst inside the organisation, quantifying and translating operations into financial outcomes so the cash agenda is heard.”

Why succession planning is no longer optional for today’s treasury leaders

Michael Ben Moshe, VP and head of global working capital and cash optimisation at Teva, and Carol Thurnheer, Senior manager international treasury for the Americas and M&A at Haleon, will be speaking at the EuroFinance International Treasury Management 2025, at Budapest on the session Working capital optimisation and supply chain resilience.