Treasury operations
Treasury operations infrastructure
The treasury function must be set up to support the business. This includes structuring the function to reflect the needs and culture of the organisation, establishing a framework of policies and procedures which enable the treasury to be resilient to external shocks (disaster recovery) to function effectively, and build strong relationships with the business and financial institutions.
Financial products and markets
A thorough understanding of the various financial markets and related instruments is core to treasury. Familiarity with the intricacies of transacting such products and the risks and benefits they offer the business, as well as the ability to explain products to non-treasury members of the organisation are key.
Technology
The use of technology can improve the accuracy and security of treasury transactions, and deliver solutions to manage payments infrastructures, disaster recovery and automation. The wide range of systems products available need to be thoroughly evaluated to ensure they meet the requirements of the organisation. Systems must be aligned to the treasury's delegated powers, policies, procedures and audit requirements to be effective.
Cash management
Efficient cash management is crucial to the long term success of the organisation. This involves identification and implementation of a) cash management solutions for day to day funding of operating units (e.g. sweeps, pools, remittance factories, shared service centres, in-house banks) and b) mechanisms for remitting cash across a group (e.g. royalties, dividends, loans, intra-group trade).
Liquidity management
Liquidity management focuses on the organisation's short term need to meet payments as they fall due. This can be achieved through the development of accurate cash flow forecasting solutions, and the management of working capital and external sources of funds to ensure resilience.
Trade finance
Trade finance relates to operational cash flows and specifically to supporting customer and supplier transactions. Trade finance solutions (e.g. letters of credit, bank guarantees, performance bonds, export finance) manage the risks which arise with cross border trading. It also covers supply chain finance (e.g. factoring and customer finance solutions).
