Term
Treasury
Managing a company’s money: cash monitoring, payment planning, financing, bank relationships and managing currency and interest rate risk. In a small company the director does it with the accountant, in a larger one a dedicated department.
Updated
What it means
Treasury is managing a company’s money in the broadest sense. It covers monitoring cash in bank accounts, planning receipts and payments, arranging financing, managing banking relationships, investing temporarily idle funds and managing financial risks, especially currency and interest rate risk.
The foundation of treasury is a clear view of liquidity: how much cash the company has, how much is coming in and how much it must pay in the coming days, weeks and months. This shows whether it needs to draw on credit or, conversely, can place a surplus, for example in a term deposit.
In a smaller company, treasury is usually handled by the director with the accountant; in a larger one, by a dedicated department under the CFO. Groups also use tools such as cash pooling, which concentrates subsidiaries’ cash and reduces the need for external financing.
How it works in practice
We help clients set up a simple weekly cash overview: account balances, expected customer receipts, invoices due, payroll, taxes and loan repayments. Even this basic tool often reveals a liquidity problem weeks in advance, while it can still be solved.
For companies buying or selling in foreign currency, we address currency risk. Sometimes a natural hedge suffices, where income and expenses in the same currency balance out; sometimes hedging with bank forwards is worthwhile. The decision depends on the size of the exposure and the margins.
Treasury also includes managing banking relationships: number of banks, loan terms, fees and account permissions. A regular review often uncovers needlessly expensive services or outdated access rights that should be removed.
What to watch out for
The most common mistake in smaller companies is managing money by the account balance alone. The balance does not show what falls due tomorrow, and a company that feels rich can face a shortage of cash for wages a week later.
Treasury should not be speculation. Complex financial instruments the company does not understand can bring losses instead of reducing risk. When hedging, the goal must be clear: reduce uncertainty from ordinary business, not profit from currency movements.
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