Roles/Functions of Treasury Management

The primary function of treasury management is to manage an organization’s financial resources, including its cash, investments, and risk exposures, to ensure the achievement of its financial goals. Some of the specific roles and functions of treasury management include:

Cash management: This involves managing an organization’s cash flows to ensure that it has sufficient funds to meet its short-term and long-term obligations. This includes monitoring cash balances, forecasting cash flows, and optimizing cash usage.

Investment management: Treasury management is responsible for managing an organization’s investment portfolio to maximize returns while minimizing risks. This includes selecting appropriate investment vehicles, monitoring performance, and implementing investment strategies.

Risk management: This involves identifying, assessing, and mitigating various types of financial risks, including credit risk, market risk, interest rate risk, foreign exchange risk, and commodity risk. Treasury management uses various risk management techniques such as hedging and insurance to mitigate these risks.

Funding and capital management: Treasury management is responsible for managing an organization’s funding and capital structure to ensure that it has sufficient capital to support its operations and growth objectives. This includes raising capital through debt and equity financing, and managing debt repayment schedules.

Compliance and regulatory reporting: Treasury management is responsible for ensuring that an organization complies with all relevant laws and regulations, including tax laws, accounting standards, and financial reporting requirements. This includes preparing and submitting regulatory reports and filings, and maintaining appropriate internal controls.

Overall, the role of treasury management is critical to the success of an organization, as it ensures the effective management of financial resources and the mitigation of financial risks, while also providing strategic guidance to support the organization’s growth and development objectives.

Treasury Management is all about the efficient management of liquidity and financial risk. Some of the important functions of treasury management are:-

Cash Management: It involves efficient collection and repayment of cash to both insider and third party.
Funding Management: It helps in planning and sourcing firm’s short, medium and long term cash needs. Treasury management assists in capital structuring, forecasting of future interest and foreign exchange rates decision making process i.e., management of foreign exchange rate risks, in accordance with the Company policy.
Currency Management: It helps in managing the foreign currency risk, exchange rate risks and directs towards the currency to be used for overseas billing etc.
Corporate Finance: It involves in merger and acquisition, capital structure, right issue, etc.
Banking: Treasury Management helps in maintaining good relationship with bankers and carryout initial negotiation with them for any short-term loan.
Venture Capital Financing: It involves in new high-risk venture of getting venture capitalist.
Maintaining good relationship and liaison with financiers, lenders, bankers, and investors (shareholders).
Advising on various issues of corporate finance like capital structure, buy-back, mergers, acquisitions, disinvestments etc.