Know The Vital Role Played By The Management Of Treasure In Handling Cash

A trend is now happening that businesses are turning towards the end goal aiming to maximize the wealth. Even the corporations translate to maximize the wealth of shareholders. The management of treasure now drives value through maximizing for companies the cash liquidity so that there is fluctuating cash needs and flow. It achieves it through medium-term, short-term financing, and cash flow management. The Gestion de la trésorie plays a vital role in ascertaining a company has the cash at all time to operate its business.

Treasury management is the process that involves managing investments, cash, and other financial business assets. The goal is to optimize current activities and ensure medium-term liquidity, thereby make financial solid decisions taking into investable and invested assets. The treasury management includes hedging that needs to decrease the exposure to financial risk.

Management of Cash Flow

It is important that all the small businesses have cash. The profitable companies actually fail owing to lack of cash on hand resulting in non-payment of bills. The treasury management monitors the amounts and timing of cash outflows and inflows as a critical cash flow management component. The cash inflows include conversions to cash as accounts receivable, asset sales or dispositions, short and medium-term borrowing, and accounts payable conversions. The treasure management includes tracking and monitoring the activities that require using cash in large.


The role of treasury management involves lengthening the time of a company retaining the money required to pay its bills and at the same time they shorten the time for the money they are due to the customers. The processes of treasury management include setting of accounts receivable and payable policies, defining collection terms and setting credit approval policies. These activities offer a company extra short-term cash to earn interest or with float. The larger companies establish money market accounts and savings to use as sweep accounts so that they earn on incoming funds or short-term interest such that the firm will use the bills to pay.

Risks and Relationships

Treasury management in larger corporations include managing the shareholder relations, financial risk and ensures adequate and right sharing of financial information.  There is significance of the shareholders relations as the strong relations offer a belief in the strategy of the company. This allows the corporations to include additional funds so that those funds are raised from the existing shareholders. The financial risk management establishes financing alternative plans from currency or commodity risk for upcoming projects.

Comments are closed.