Treasury Management
Short definition
Treasury management is the day-to-day and medium-term running of cash, liquidity, funding, FX and rate risk. It manages solvency of payments and open positions, not accounting profit.
Detailed explanation
Core work: cash forecast (13-week), cash pooling, facilities and collateral, payments, open FX and rate books, the hedge ledger. Policy separates hedge from speculation and sets counterparty limits.
Treasury is a control function apart from budget and accounting: if authority, confirmation and valuation (front/middle/back) blur, hedge accounting and unauthorised positions follow.
Why it matters for the CFO
A profitable firm still stops in an FX shock or at a maturity wall without treasury discipline. Bank coverage and cash visibility are the CFO’s first 13 weeks.
How to read it
Treasury success is not EBITDA; it is forecast error, hedge effectiveness and limit breaches. Speculative gain is not a treasury KPI.
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Definitions are educational. They are not investment, credit or tax advice.