What is Treasury Management?

Treasury management refers to the area of finance that oversees the effective and efficient use of a company’s financial assets. Specifically, treasury management involves daily liquidity and risk management tasks that ensure the availability of adequate cash resources needed to sustain ongoing operations. By ensuring the availability of funds, treasury management enables the implementation of initiatives designed to achieve the firm’s overall strategic objectives.

Overall Goal of Treasury Management 

The primary goal of treasury management is to effectively and efficiently manage an organization’s cash and related financial assets (and liabilities) to support the achievement of the organization’s business objectives and strategy. This goal is critical because all firms, no matter how successful, have a finite amount of liquid assets on hand during a given period of time.

Treasury Management

Key Functions of Treasury Management 

The major objectives of treasury management include the following:

  • Maintain Liquidity
  • Optimize Cash Resources
  • Manage Risk
  • Maintain Access to Short-term Financing
  • Manage Investments
  • Maintain Access to Medium and Long-term Financing
  • Manage Information and Technology
  • Collaborate with Other Departments
  • Manage External Parties

The first five objectives represent core cash management activities performed by treasury professionals. Cash management activities ensure that the firm can meet its obligations. Poor cash management can cause even profitable companies to experience financial distress.
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Essentials of Treasury Management 

The Essentials of Treasury Management was developed by a panel of experts to reflect the significant role treasury professionals take in their organizations and the global capital markets. Mastery of the best practices and roles defined in this work, as demonstrated through the CTP, ensures that professionals are prepared for the changing requirements of the profession. Click here to learn more about the Essentials of Treasury Management, 7th Edition, and order yours today.