Why Treasury Management is Important

 Treasury management is important because it helps any organization optimize financial resources and manage financial risks effectively.

Aside from managing funds, companies also use treasury management to mitigate potential future risks. Typically, risks can be presented as financial, reputational, and operational.

·        Treasury management can take steps to cushion the financial blow to unexpected losses, how to bolster their internal processes and how to share the information with customers or partners. Overall treasurers are like financial advisors to their companies.

·        Treasury management plays an important role in banking relationships. These key relationships require ongoing reliance and transparency. A trusted advisor will help a company find the value in data to capitalize on opportunities that may not otherwise be known to them.

·        Treasurers also handle foreign exchange risks to determine any underlying exposure.

·        Treasury management is responsible for managing and mitigating risk, for example related to foreign exchange risk, interest rate risk, liquidity risk, or risks related to strategic investments.

 

Organizations need to carefully manage treasury operations in order to ensure that Managers will have sufficient amount of cash to meet any short-term obligations, while also having enough funds available to invest in long-term growth opportunities.