Introduction to Treasury Management

Treasury Management

a management system optimizing company’s liquidity, while mitigating financial, operational, and reputational risks.

Treasury Management System (TMS)

• a system ensuring business successfully manages their financial risks.

• a creation and governance of procedures and policies to help companies manage their cash flow in all aspects.

Cash Forecasting

• this function and roles of treasury is the beginning of all other roles in the operation of the treasury department.

• you have to anticipate what’s moving forward.

• this is where fund inquiry happens.

Accounting Staff

these treasury staff handle cash receipts and disbursement activities.

Treasury Staff

these staff compile records from the accounting staff and generates cash forecasts.

Working Capital Management

• this function and role of treasury is a key component of cash forecasting, where major usage of company’s cash is.

• The changes in the levels of current assets and liabilities, in response to the company’s sales level.

• used for short-term needs.

Cash Management

• this function and role of treasury combines information in the Cash Forecast and Working Capital Management activities.

• the treasurer ensures sufficient cash is available for operational needs.

• you look after funds for present operational needs.

Investment Management

this function and role of treasury is responsible for proper investment when the forecast shows excess funds.

Treasury Risk Management

• this function and role of treasury is responsible for creating risk management strategies and hedging tactics to mitigate risks in:

  • Market interest rates

  • Company’s forex positions

Credit Rating Agency Relations

• a function and role of treasury, where credit rating agency will review the company’s financial condition. The treasury staff should promptly provide information requests for review.

• a company may issue marketable debt.

Bank Relation

• a function and role of treasury where treasurers often meet with banks and its representatives that the company uses to.

• a long-term relationship with the bank can help alleviate financial difficulties.

Fund Raising

a function and role of treasury where it maintains an excellent relationship with the investment community for fundraising purposes.

Other Function and Role

a function and role of treasury where treasury staff also monitor market conditions constantly.

Developing a global treasury talent center and organization

• an effective treasury organization must consider global capabilities and maximize use of existing structures, analytic capabilities and markets.

• the first step is to create updated policies and practices that identify key areas of responsibility.

• 4 pillars of treasury management.

Creating an analytical hub and agent of change that supports business decisions

• advanced analytic capabilities. Including predictive analytics, are a leading practice to effectively manage financial risks.

• treasury departments should also have key insights and information on economic events.

• 4 pillars of treasury management.

Developing an “agile” treasury organization that can quickly react to the changing business cycle and manage financial risks

• treasury organizations need to respond quickly to key internal and external events.

• a flexible treasury organization does have ever-changing regulations.

Enabling technology through implementation of an appropriate treasury management system (TMS)

• leading treasury departments use either the two types of TMS:

  • TMS Vendor

  • ERP such as SAP

• the use of SWIFT for secure messaging.

• 4 pillars of treasury management.

Treasurer

refers to the head of a treasury department