In a growing fintech company, managing financial operations is crucial for maintaining liquidity, meeting regulatory requirements, and supporting growth. Two key functions in financial management are Accounts Payable (AP) and Treasury, but understanding the distinction between the two and assigning ownership is essential for efficient financial control. While both departments deal with cash flow, their roles and responsibilities differ. Here’s a breakdown of AP and Treasury functions and who owns what in a fintech environment.
1. Accounts Payable (AP) – Managing Outflows
AP’s Role: The primary responsibility of AP is to manage the company’s outflows—that is, ensuring timely payments to vendors, suppliers, contractors, and other business partners. AP is responsible for processing invoices, verifying them against purchase orders, securing approval, and ensuring that payments are made in accordance with agreed terms. AP also ensures compliance with tax regulations and maintains proper documentation for auditing purposes.
Key Responsibilities:
- Invoice verification and approval
- Payment scheduling and execution
- Vendor relationship management
- Reporting and reconciling AP transactions
In fintech, where vendors may range from software providers to payment processors, AP ensures smooth relationships and avoids late payments that could affect service continuity.
2. Treasury – Managing Cash and Liquidity
Treasury’s Role: The Treasury function focuses on managing the company’s inflows, cash position, liquidity, and financial risk. The treasury team ensures the business has sufficient cash on hand to meet its short-term and long-term obligations. Treasury is also responsible for optimizing cash flow, managing funding requirements, and overseeing investments, including foreign exchange (FX) and interest rate risks.
Key Responsibilities:
- Cash flow forecasting and management
- Banking relationships and financing strategies
- Managing liquidity and working capital
- Risk management (foreign exchange, interest rates)
- Investment decisions
For fintech companies that handle payments, loans, or investments, Treasury is critical for ensuring that funds are allocated efficiently across the business and available when needed for operations or strategic initiatives.
3. Collaboration Between AP and Treasury
While AP and Treasury have distinct responsibilities, they must collaborate closely. AP ensures payments are processed efficiently, while Treasury manages overall cash flow and funding to ensure the company has sufficient liquidity to meet its obligations. Regular communication between the two functions is key to balancing cash flow, meeting payment deadlines, and minimizing financial risk.
In conclusion, in a fintech company, AP and Treasury play complementary roles. AP focuses on managing outgoing payments, while Treasury manages cash, liquidity, and financial risks. By understanding and defining these responsibilities, fintech companies can ensure better financial control, smoother operations, and sustainable growth.
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