12 Myths of Treasury | Part 4

By Marianna Polykrati

26/02/2025

In the final part of 12 Myths of Treasury, Marianna Polykrati tackles the last three misconceptions that have influenced her career and the experiences of fellow treasurers.

Article Overview

  1. Myth 10: “Treasury is All About Short-Term Task”

  2. Myth 11: “Liquidity Will Always Be Available When Needed”

  3. Myth 12: “Any Finance Professional Can Handle Treasury.”

Myth 10: “Treasury is All About Short-Term Tasks“

Treasury is often perceived as being focused solely on day-to-day operational tasks like payments, cash management, or bank reconciliations. This view reduces treasury to a transactional function rather than a strategic one, tied to the company’s long-term goals.

Treasury plays a critical role in shaping a company’s long-term financial stability and strategic direction. While day-to-day operations are part of treasury’s responsibilities, the true value lies in long-term planning, risk management, and supporting the company’s broader strategic objectives.

I’ve seen treasury lead initiatives that go beyond the transactional. Whether it’s designing a multi-year funding strategy to support growth, navigating complex M&A financing structures, or collaborating with other departments to align financial planning with corporate goals, treasury often acts as the backbone of a company’s financial future.

For example, when treasurers are structuring and managing long term bond loans (5-7 years tenors) or setting up project financing that can reach a tenor of 15 years, treasury should ensure sustainable cash flows over the life of the loan or project financing and align with capital repayment schedules to avoid liquidity constraints. Thus it is of high significance for both the treasurer and the business to be an integral participant during the setting up of the organization’s business plans.

Additionally, treasury is integral to M&A transactions and investment plans, working on long-term funding strategies, aligning liquidity needs with the company’s growth ambitions and at the end assisting further in the smooth integration of the newly acquired company. These responsibilities require detailed forecasting, risk mitigation, and alignment with corporate strategies to maintain financial health.

Treasury is not just about short-term operations; it’s about creating long-term value and ensuring the organization thrives in an ever-changing financial landscape.

Myth 11: “Liquidity Will Always Be Available When Needed”

There’s a dangerous assumption that liquidity is something businesses can always access when required, whether through cash reserves, credit lines, or financing options. This belief overlooks the complexities and challenges involved in maintaining liquidity, especially during periods of economic uncertainty or market volatility.

Liquidity is not guaranteed—it requires careful planning, proactive management, and constant vigilance. Treasurers play a critical role in ensuring that liquidity is not only available but also accessible at the right time and in the right place, particularly in large group structures. It’s not uncommon for a group to have sufficient liquidity overall but find it locked in a subsidiary where transferring it isn’t feasible, or where the most effective method, such as a dividend payment, isn’t applicable. Managing these complexities requires foresight and coordination.

Treasurers must also contend with the reality that funding availability can be inconsistent. Financial institutions often seem to act like offering umbrellas on sunny days –providing credit during stable periods- but withdrawing support when the clouds gather. I recall a specific instance during the Greek liquidity crisis when foreign banks began exiting the market and demanded repayment of overdraft facilities within days. Fortunately, we had proactively secured sufficient credit lines with local Greek financial institutions, allowing us to navigate this challenge without disrupting operations.

From my own experience, relying on external funding or credit lines without a robust liquidity management plan can backfire. Proactively building cash buffers, diversifying funding sources, and maintaining strong banking relationships are essential strategies to ensure stability during turbulent times.

Treasurers also prepare for unexpected events by implementing cash flow forecasting models, managing intercompany funding arrangements, and ensuring alignment with business needs. Effective liquidity management isn’t just about having cash—it’s about ensuring it’s accessible when and where it’s needed most.

Liquidity isn’t always available—it’s built through foresight, strategic planning, and a comprehensive understanding of business needs and constraints.

Myth 12: “Any Finance Professional Can Handle Treasury.“

There’s a common belief that treasury is simply an extension of finance, and any finance professional—be it an accountant, controller, or finance director—can seamlessly manage treasury functions. This myth diminishes the specialized skills, expertise, and strategic mindset that treasury demands.

Treasury is a distinct and highly specialized discipline. While it intersects with other financial roles, treasury requires a unique combination of technical expertise and soft skills that sets it apart from other finance functions.

Treasurers must possess exceptional communication skills, as they often act as a bridge between internal teams and external stakeholders like banks, investors, and rating agencies. They need problem-solving abilities to untangle complex financial puzzles, and out-of-the-box thinking to devise creative solutions in high-pressure situations. Organizational skills are critical to managing multiple priorities, from liquidity planning to risk management, while maintaining a clear focus on the company’s strategic objectives.

One skill that stands out is the ability to say “no” firmly, but constructively. Treasurers often face requests or ideas that could compromise the company’s financial health, and it’s their responsibility to push back—but always with well-considered alternatives that align with the company’s goals.

From my own experience, I’ve seen cases where finance professionals underestimated the complexity of treasury. They excelled in areas like accounting or controlling but lacked the market knowledge, adaptability, and strategic mindset required for treasury’s dynamic challenges. Treasury is not just a function; it’s a strategic pillar that requires dedicated focus, unique skills, and the ability to thrive in uncertainty.

Catch the recording of Marianna and her fellow panelists discussing Generational Diversity in Treasury!

As generational diversity reshapes treasury teams, fresh perspectives meet time-tested strategies. But with it come challenges and opportunities in communication, expectations, and work styles. Marianna’s insights are not to be missed

Watch the recording

Marianna Polykrati

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