Structure and Organization of Treasury
The financial management of a non-financial company is divided among treasury activities and controller activities. This is a differentiation among cash flow in treasury and financial reporting. Corporate treasury functions let in cash management, debt management, investment, investor relations and financial risk management . Treasury functions also address with complex financial areas, such as derivatives, interest rate swaps and foreign exchange rates, among other things. Treasury functions also may differ among, say for example, a bank and manufacturing firm. Controller executes the main tasks of recording, external and internal financial reporting. Both the controller and treasurer are responsible to the top management.
A brief statement of Corporate Treasury Functions:
Liquidity Management
Payments and collection
Electronic Banking
Cash Management
These can be furthermore classified into:
Mechanism for financing
Management of Bank account
Bank reconciliations
Consolidation of cash forecasts
Forecasting short-term and long-term fund needs
Investing surpluses
preserving a proper balance among assets and financial obligation
Managing cash across several countries wherever applicable
Payments and collections proceeding
Investment and Debt Management
Bank borrowing
Dividend policies
Investment in marketable securities
Sale and redemption of issued instruments
Stock and bond issuance
Financial Risk Management
Liquidity Risk
Credit Risk
Currency risk
Interest rate risk
Share value risk
Investor relationship
These functions relate with
Financial intermediaries
Foreign exchange market
Interest rate change
Stock Market
The above specified functions may change based on nature of business or industry. The treasury department is responsible for the timely accessibility of funds requisite for the back up of the business.
The Controller of a company has to record all the above mentioned business deal and to report it. The primary activities of a Controller are:
Month end closings.
Internal reporting and forecasting.
Reporting of external financial.
The above can be furthermore sub-divided into:
Recording of all business deals in general and subsidiary ledgers wherever applicable.
Reconciliation and recording of short term investment amounts with the brokerage business firm.
Keeping the record of the attendance of the staff and thus serving the HR department in preparing payroll.
Other recordings.
Reporting to the top management
Addressing with tax issues etc.
The functions of treasury and controller are not confined to the aforesaid functions alone. based upon an organization's need, they act within the scope of their authority. Proper co-ordination of both the controller and treasury is a requisite for efficient control and functioning of an enterprise.
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