Treasury management is the process of managing an organizations financial resources to achieve its strategic and operational objectives. It involves managing a company's daily cash flows and larger-scale decisions when it comes to finances. The ultimate goal of treasury management is to manage the firm's liquidity and mitigate its operational, financial, and reputational risk. Treasury management includes a firm's collections, disbursements, concentration, investment, and funding activities. It encompasses a wide range of activities, including cash management, funding and investment management, risk assessment, and day-to-day operations like banking and invoicing.
In larger firms, treasury management may also include the financial risk management function. Most banks have whole departments devoted to treasury management and supporting their clients' needs in this area. Treasury management plays an important role in banking relationships and requires ongoing reliance and transparency.
Treasury management services can streamline business finances by managing cash, investments, and other financial assets. It's a management system that optimizes a business's liquidity while also mitigating its financial, operational, and reputational risk. Treasury management encompasses collections, disbursement, information reporting, capital management, currencies, and risk management for businesses. As a business grows, fraud and risk management become more important concerns, and cash management services can help with fraud detection and prevention.
Overall, treasury management is an essential part of any business, and it is vital to understand what it is and what it can do for a company.
