The treasury team’s role in a company has significantly changed since the 2008 financial crisis. Treasurers have taken a step further from managing working capital and assumed a lot more responsibility within the organization where they work. They’ve started working closely with the business’s senior management, taking on the strategic partner role.
Today’s article will define the role of a treasurer, explain treasurer duties in an organization, and discuss their contributions to solving management-level problems. This article applies equally to profit orientated businesses as well as Not For Profit associations or charities.
A treasurer or a certified treasury professional is a finance expert that manages and oversees the finances and/or budgetary goals of a business or an organization. Treasurer’s responsibilities differ depending on the size of the company or organization.
Smaller organizations typically lack internal accounting support. So, treasurer tends to take on the duties of an accountant or the finance department. These responsibilities include bookkeeping, writing checks, preparing financial statements and reports, making bank deposits, and so forth.
Treasurer job description is a lot different in larger organizations. Here, their role is much more strategic in nature — they evaluate the company’s funding model, help the board develop financial literacy, and discuss financial strategies with its members. Essentially, treasurers ensure that the organization is financially viable and that its finances are managed effectively and strategically.
Treasurer’s role and responsibilities differ depending on the board’s organization and expectations. These duties typically include:
However, one of the most important aspects of this job includes working with senior management. Treasurers help the board members understand the numbers, manage financial risks, and address incurring issues promptly. The goal is to boost the bottom line — that is, the company’s overall profits.
Board members must be financially literate in order to understand and approve budgets and policies, review and monitor financial statements, analyze data, etc. Treasurers can help them by supplying a basic financial glossary.
You can make all the financial data more digestible by using strategies like traffic light dashboards. This strategy uses colours (red, yellow, and green) to highlight different areas in the report and show where the performance is or is not on track. It will provide directors with a better view of business setbacks and areas that require more attention.
You should use the videos, presentations, group exercises, role-plays, and other tools to help and educate board members. These training sessions should allocate enough time for discussions and questions and answers.
Supervising the financial department, overseeing budget updates, and creating financial reports also fall under treasurers’ responsibilities. They gather enough financial information to build strategies that will reduce costs and raise efficiency.
Therefore, the treasurer of an organization or a business also serves as a reference point for board members when it comes to:
You’ll provide advice and guidance to the board members and influence their decisions to plan and achieve the organization’s objectives effectively.
In business, risks are defined as uncertainties that affect an organization’s objectives positively and negatively. Treasurers can increase and/or protect an organization’s or business’s value by analyzing and managing those risks.
Financial risks can result from several sources, including:
Treasurers work with the board to create a set of policies that outline the methods to manage the risks mentioned above. The treasury department and other authorized personnel receive responsibilities and powers regarding these policies.
If the solution in relation to financial risks is not clear, treasurers must come up with a plan by weighing its pros and cons in a given situation and consulting with relevant specialists. Data and scenario analysis are some of the tools treasurers will implement before recommending a solution.
A good treasurer must possess the following qualities to provide an organization or business with the necessary financial accountability:
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