In an increasingly competitive and changing business environment, treasury management has become an essential aspect of any company’s financial information. It constitutes a central element when optimizing
Below, we will provide a complete and detailed overview of this key area of business management. From basic concepts to the most complex processes
What is treasury management?
Treasury management, or cash management, is the process by which a company’s cash flow is managed. Basically, it consists of the management of a company’s cash, and has two fundamental functions:
- Track incoming and outgoing cash flows.
- Taking steps to ensure that the company always has enough cash to cover its expenses and meet its financial obligations.
At its core, treasury management involves planning, tracking and managing income and expenses.
Objectives of treasury management
The primary objective of treasury management is to ensure that a company has sufficient cash on hand at all times to cover its expenses and meet its financial obligations. In addition to this, there are several other important objectives that must be kept in mind:
- Maximize business profitability – Treasury management can help maximize a company’s profitability by ensuring cash is available for profitable investments and opportunities.
- Minimize risk : It can also help minimize a company’s risk by ensuring that an adequate level of cash is maintained on hand to cover emergencies and unforeseen situations.
- Reduce financing costs – Treasury management can also help reduce a company’s financing costs, by ensuring that adequate cash levels are maintained and by taking steps to reduce the need for external financing.