Objective of Treasury Management

Following are the main objectives of Treasury Management

Cash Management: Local government finance professionals and paraprofessionals need a thorough understanding of cash management and investments that produces the greatest yield. The treasury management process involves people inside and outside of the organization. This first lesson covers the overall goals of cash management as well as the understanding of the treasury management process from inception to end.

Banking Services: Treasury managers are challenged to keep their banking relationships strong and professional while many internal and external factors could potentially impact those relationships

Forecasting: Cash flow forecasting is critical for a treasury manager. Without proper cash flow forecasting, it is impossible to know what amounts can be invested and for what period of time.

Collections: The object of collections is to increase the amount of funds available for investing by speeding collections into the government’s bank account.

Disbursements: Disbursements should be timed so that they remove cash from the local government’s treasury only at the last possible moment. A major goal of disbursement systems is to slow the payment of funds so that the maximum amount of funds possible is available for investment for the longest possible time. At the same time, the treasury manager must ensure that payments are made to creditors, suppliers and employees in a timely manner.

Investments: The safety of public funds should be the foremost objective in public fund management. The investment function can only take place after all of the other important activities of establishing banking relationships, understanding the inflow and outflow of revenues and disbursements and constructing a cash flow forecast. Once the investment process begins, investments become one of the most important responsibilities of the treasury manager’s job.

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