Ensure your Treasury today fulfills the important Duties

Dear visitor. This website was created as part of a school project at Noroff. In time I aim to update it, so that it can offer some help and inspiration to the many people working today within the Treasury profession.

The Treasury of the largest companies

Generally we split the responsibilities into five areas.

Cash Management

Cash Management is about making sure the organisation has the money it needs when it needs it. It is about planning ahead. Having the information of investments and operating cost on one side, and the major income on the other side. Reducing the amount of idle cash, piloting and steering the cash.

Debt Management

Debt Management is about managing different types of loan and overdraft. Making sure the conditions of the loan agreements are always respected. Some loans can be tied to the production or to a project, some loans may be secured by mortgage in fixed assets, while others could have undertakings such as negative pledges. Some multicurrency credit lines may have a higher cost but also a higher flexibility to draw down and repay. Source, negotiate and taylor the loans.

Bank Relations

Big companies typically work with several banks. Maintaining these banking relations are key to get the best service, products and conditions.

Security of Payment Channels

Not so many years ago, instructions to pay were sent to the bank by telefax. It was a time when many companies fell victim to fraud. Luckily the times have changed. In many cases the Accounting Department (for invoices) and the Personnel Dept (for salaries) would extract from their software a file, this file would then be uploaded into a payment channel. The payment channel would either be owned by a bank, or developed elsewhere. In the two cases the information would be sent to the bank encrypted.

Last Control before Payment

When invoices have been processed and is ready to be sent to the bank, the Treasurer is the last control. The Treasurer is not expected to check every invoice, but he/she is expected to check a randomly a number of them. Check the invoices against commitment, budget, delivery, tax, approvals and terms

Make the manuals more detailed than your procedures

A procedural framework typically has at the top the type of instructions that should be followed strictly by everyone within the organisation, such as Directives and Charters on subjects such as company values and HSE. At the bottom of the framework the manuals are below the procedures. This means that procedures should be shorter, less detailed and less compulsory than the manuals. Manuals should be considered as guides, thus voluntary.

A Treasury Management System gets the job done

Many companies have developed a set of Key Performance Indicators (KPIs).