Treasury management managing the treasury function

MANAGING THE TREASURY FUNCTIONTreasury Department•It is the department in the organization which is responsible for the company’s liquidity. Thedepartment must also safeguard existing assets, which calls for the prudent investment of fundswhile guarding against excessive losses on interest rates and foreign exchange positions. Thetreasurer needs to monitor the internal processes and decisions that cause changes in workingcapital and profitability, while also maintaining key relationships with investors and lenders.PRIMARY OBJECTIVES OF THE TREASURY DEPARTMENT1. Hedge risks as soon as they ariseIn this approach the treasury department has as its principal objectives the minimization ofthe financial consequences of an adverse movement in financial exposure. With this type oftreasury department, financial risks that can be measured with an appropriate degree ofaccuracy are hedged as soon as they are identified.2. Add value through the treasury departmentFew departments within an organization would subscribe to the view that they are solelycost centers. Many organizations believe that their treasury team should add value throughtheir activities. This value addition comes from the department providing a proactive serviceto operating units, subsidiaries and other departments within the organization. Theseservices will vary according to the activities of the company, and can cover a wide range ofpotential areas.Examples are:➢ Working with subsidiaries/ … Purchase document to see full attachment

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