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CORPORATE TREASURY

MANAGEMENT
by webmanager
on December 16, 2015
in Finance
Treasury Management is a relatively new concept in Ghana. It was introduced into the banking
sector in the early 1990s but is non-existent in the Ghanaian corporate world except for a few
multinational companies.
In the developed world, the establishment of the specialist treasury function can be traced back to
the late 1960s when it was part of the finance department. There was therefore the need to
separate the treasury function from the finance function, which is primarily responsible for the
provision and management of financial resources. The separate treasury function enhances the
development of appropriate skills and achievement of economies of scale. The Treasurys
primary role is to monitor the opportunities and risk for business as a result of developments in
technology, the breakdown of exchange rates and the increasing globalization of business.
The treasury function is the management of monetary assets and liabilities, financial risks and
other risks associated with banking relationships. This includes activities such as cash
management and transmission, placing and liquidating investments, raising and redeeming
finance and the management of foreign exchange and interest rate exposures. All of these have to
be managed in such a way as to maximize yields, minimize costs and control the related risks
within approved limits.
Today, Ghanaian businesses are growing and becoming global in their operations. Some have
assets that can be equated to that of a non-bank financial institution. Generally, businesses have
to survive in a complex financial environment and thus need to actively manage both their ability
to take advantage of opportunities and their exposure to risks. It is imperative for such
establishments to separate the treasury function from the core business of the company so that,
like the banks, each business unit is responsible for a set objective that is in line with the
companys mission and shareholders expectations.

The role of corporate treasury


Corporate treasury departments provide a vital role and have developed significantly in the
decade or so. The role of the corporate treasury is directly related to the nature of the companys
business activities and the objectives that executive management and the board assign to it. A

company that imports and retails merchandise through its chain of outlets throughout the country,
would require some expertise in foreign exchange, interest rate and cash management.
The level of the corporate treasurer within management depends on the companys level of
responsibility allotted. This would definitely affect the extent to which the department or unit can
initiate and develop policy in line with the agreed corporate policy. Further, outside of what may
be considered the core universal responsibilities of treasury management, there are always
potentially grey areas between what treasury management is and what is financial control,
company secretarial, tax, risk management and insurance. It is therefore unlikely that any two
corporate treasurers will enjoy exactly the same responsibilities and even in similar companies,
their roles and responsibilities will differ.
Based on the foregone, we can define the role of the corporate treasury under five core functions.
They are;

Corporate Finance and Funding

Cash & Liquidity Management

Corporate Financial Management

Risk Management

Treasury Operations & Controls

Corporate Finance and Funding


Under this umbrella, the treasurer considers the funding options that are available to the
company and the way funds are raised to finance the business and on what terms such funding
can be acquired and managed.
The funding gap of a company could be financed by short, medium or long term options. The
determination of the type of financing required is the first step to consideration of the type of
funding
This is an area that often requires building external relationships and negotiating with providers
of either equity or debt.

Cash & Liquidity Management

Cash and liquidity is principally about ensuring that the cash needs of the company are met in the
most cost effective manner. The type of company to a large extent determines its cash and
liquidity management.
Effective cashflow management and forecasting would aid the company from incurring the
unnecessary costs of unforeseen short term borrowing and or avoid holding large pools of cash
and ensure its effective deployment into appropriate investments.
Corporate Financial Management
Companies need to ensure that their corporate and financial strategies are appropriately aligned.
Potential investments need to be appraised, the assets should be providing the required return and
that the company is running the most appropriate capital structure.
Corporate financial management includes ensuring that legal and tax issues are appropriately
considered.

Risk Management

TREASURY MANAGEMENT
Treasury Management is nothing but Corporate Wealth Management and it materially affects going
concern

of

the

company.

Treasury Management, in this day and age, has increasingly become strategically significant across all
the areas of the business, and its importance cannot be ignored. A lot of time is being spent on
Treasury functions without knowing them. Whether raising capital from owners or borrowing from
banks or managing debtors for receipts or making payments or purchasing capital assets or managing
surplus to generate income or hedging foreign exchange and other risks; all of these are Treasury
functions. The more time is spent on these functions, the less time is there for core business activities
i.e.

growing

the

company.

We provide consulting on opportunities in exploiting Treasury functions to generate surplus cash or


additional income that organizations never knew before.

Role of NJP:

Analyze Financial Market Capital, Foreign Exchange, Commodity, Interest Rate, etc.

Exploit Capital Structure to reduce average cost of borrowed funds and increase return on
owned funds (ROE)

Arrange funding from banks, financial institutions, Private Equity or Venture Capital players

Design and implement Budgeting and MIS reporting system

Improve processes to increase efficiency, save cost or protect profitability

Take ownership of the entire accounting and finance functions allowing client to grow at much
faster rate

Increase return on surplus funds and provide guidance for effective management of various
financial risks

OUR SERVICES

Setting up business in India

RBI / FEMA Compliance

IFRS / US GAAP Reporting

Outsourcing

Wealth Management

XBRL Reporting

Transfer Pricing

Equity & Debt Finance

Treasury Management

Internal Control & Risk Advisory

Direct & Indirect Tax

Management Audit

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