At treasuryXL, we noticed a recurring issue: treasurers often feel their work goes unrecognized at the board level. To address this, we teamed up with our partners and experts in treasury and listened to CFOs to create this article, which sheds light on essential treasury tasks every CFO should know about.
By reading this article, CFOs will learn more about treasurer duties and how they affect the company’s financial stability. Treasurers will find valuable insights on effectively communicating their value to the C-suite. Together, CFOs and treasurers can work more effectively, leading to improved financial management and decision-making.
We’ve included expert opinions from industry leaders like GTreasury, Ebury, Embat, Treasurer Search, Kantox, and GPS Capital Markets & Kyriba. Their insights offer helpful guidance on how CFOs and treasurers can work together more efficiently, utilizing best practices and technology to meet the current financial challenges.
In our webinar, we discussed the perspective of a Chief Financial Officer (CFO) on the most critical tasks that treasurers should focus on, as well as the communication barriers that often exist between treasury and other financial departments. This collaborative effort aimed to close the knowledge gap between these roles and emphasize the strategic significance of treasury within a company.
The exploration not only sheds light on the essential functions of treasury but also emphasizes the need for better alignment and understanding between treasurers and their CFOs. By examining these key points, we can gain valuable insights into how treasurers can enhance their effectiveness and demonstrate their strategic importance within the financial ecosystem of a company.
If you missed this session, you can watch the recording below.
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It is important to understand the role of the CFO and the treasurer correctly. How can the role and value of the Treasurer be understood by other stakeholders?
A CFO needs to understand how treasury and the duties of a treasurer can ensure a more integrated and effective financial function, leading to better financial management and better decision-making for the organisation as a whole. This knowledge in the end empowers effective cash flow management, ensures liquidity, and mitigates financial risks.
To truly appreciate the synergy between the CFO and the treasurer, it’s essential to distinguish their distinct roles and responsibilities within an organization. Understanding these differences can help clarify how these positions complement each other in managing a company’s financial health.
“While both are responsible for the company’s financial strategy and planning, The CFO’s role is broad, outward and strategic, encompassing all aspects of the company’s financial health and long-term planning. On the other hand, the treasury’s role is more inward-facing. It is focused on day-to-day internal financial operations, particularly managing liquidity, financial risks, and capital resources.” – Duco Royaards, Head of Partnerships at Ebury Netherlands
In essence, the CFO has a broader strategic role concerning the company’s financial health, while the Treasurer concentrates on day-to-day cash management and liquidity. Together, they work in synergy to maintain the financial stability and growth of the organization.
As noted by Treasurer Search, a CFO will oversee not only treasury, but also financial planning, accounting, reporting, budgeting and organizational development. Additionally, the CFO is responsible for connecting these finance fields to the strategy of the company, reactive as well as proactive.
Victoria Blake from GTreasury notes a growing trend of closer integration between CFOs and Treasury teams. CFOs are increasingly leaning on Treasury for reliable, timely data to make informed decisions about capital structure and strategic investments. This shift highlights the rising importance of accurate financial data in supporting strategic decision-making.
Let’s then delve into the critical treasury tasks that every CFO should be aware of in their day-to-day business:
The treasurer oversees the company’s cash flow, including forecasting, monitoring, and optimizing cash positions. This involves managing bank accounts, investing excess funds, and ensuring sufficient liquidity to meet operational and financial obligations.
For example: A treasurer may analyze cash flow projections, pool cash from various accounts, and invest surplus funds in short-term securities.
Treasurers are tasked with identifying, assessing, and mitigating various financial risks, such as currency fluctuations, interest rate changes, and credit risks. They develop and implement strategies to hedge against these risks, protecting the company’s financial interests.
For example: To mitigate currency risk, a treasurer may implement a hedging program using forward contracts or options.
Maintaining strong relationships with banks and other financial institutions is critical to the treasurer’s role. They negotiate credit facilities, manage borrowing arrangements, and ensure compliance with loan covenants.
For example: A treasurer may negotiate a revolving credit facility with favorable terms for the company’s borrowing needs.
The treasurer oversees the day-to-day treasury operations, including managing bank accounts, processing payments, and ensuring accurate record-keeping and reporting.
For example: A treasurer may simplify the payment process by implementing an electronic payment system.
Treasurers must stay up-to-date with relevant regulations and ensure the company’s compliance with financial reporting requirements, tax laws, and other applicable regulations.
For example: A treasurer must ensure the company’s financial statements comply with accounting standards like GAAP or IFRS
The relationship between the CFO and treasurer should be collaborative and synergistic. The CFO sets the overall financial strategy and provides guidance, while the treasurer translates these into funding & risk plans and and manages the day-to-day treasury operations. Effective communication, trust, and alignment between the two roles are essential for achieving financial objectives and mitigating risks.
Joe Susienka
Senior Product Manager
GTreasury
“the data visibility and availability provided by embedded treasury allows treasurers and CFOs to be more proactive in market scenario planning, unlock trapped or restricted cash, and lower the weighted cost of capital.”
Joe Susienka, Senior Product Manager at GTreasury advises CFOs and treasurers to closely collaborate to manage the current economic volatility. He emphasizes that treasurers should act as strategic advisors, leveraging data and technology to navigate market instability on the frontline of managing volatility for organizations. Accurate and frequent cash forecasts are essential, requiring modern systems and automation to manage liquidity effectively.
Treasurers should invest excess cash in high-interest instruments, optimize liquidity with advanced methods like POBO and COBO, and enhance working capital by utilizing cash forecasts and potentially forming a working capital council. Investing in modern technology for automated processes, central treasury platforms, and real-time data integration is crucial. Ultimately, treating volatility as business-as-usual helps maintain stability and support growth despite economic challenges. Joe explains it all in his article here
Victoria Blake, Chief Product Officer at GTreasury adds that effective collaboration between CFOs and corporate treasury teams involves establishing clear communication channels and shared goals. Implementing a centralized platform that provides both CFOs and treasury teams with real-time, accurate financial data can foster better decision-making and alignment. Regular joint scenario planning and analysis sessions can help integrate Treasury’s operational insights with the CFO’s strategic vision, leading to more informed capital structure decisions and risk management tactics. You can read more about how embedded treasury raises data integrity challenges here.
Duco Royaards of Ebury emphasizes the importance of improving operational efficiency between the CFO and Treasury in order to prevent errors. Managing and tracking multiple platforms can be time-consuming and increase operational work for your business. The significance of operational excellence has become more prominent in building a sustainable and scalable business. Enhancing operational processes can help businesses lower costs, save time, boost sales, and increase customer satisfaction.
Ebury provides cutting-edge APIs, on which CFOs and treasurers can digitize their operations. With robust APIs boasting 99.9% uptime, businesses can integrate Ebury’s capabilities with their existing systems (ERP, CRM, accounting) with complete flexibility, control, and ease. This integration reduces administrative burdens, optimizes operational efficiency, and lowers costs, allowing CFOs and treasurers to focus on strategic growth while maintaining high operational standards.
Duco Royaards
Head of Partnerships
Ebury
Antonio Berga
Co-CEO
Embat
The first 100 days of a CFO‘s tenure represent a unique short-term opportunity to “build” a solid leadership foundation both internally with different areas of the company like treasury and externally with key stakeholders’ Antonio Berga- Co-CEO Embat. The CFO’s leadership increasingly involves them in the creation and development of the company’s corporate culture. For this reason, they need to have the right resources to rely on to help them navigate the “transformation” of their role, making the necessary changes to “free” up time to tackle their new objectives’ -Antonio Berga,
As Berga points out, “The role of the CFO has become that of a key figure in defining strategy, not only from a theoretical standpoint but fundamentally regarding the leadership of its execution, ensuring the company’s future viability.” The modern CFO is more strategic, requiring a deep understanding of both short- and long-term business goals.
In their whitepaper, Berga emphasizes the evolving relationship between the CFO and corporate treasury, underlining the CFO’s transition into a more strategic role. This shift positions the CFO as a key leader in driving business strategy and digital transformation, which directly impacts treasury functions. The CFO’s broad view of the company enables them to manage liquidity, investments, and financial risks more effectively, while also incorporating ESG criteria into financial decision-making.
Pieter de Kiewit
Managing Director
Treasurer Search
Antonio Rami
Chief Growth Officer and co-founder
Kantox
Alex Youngman
Vice President of Sales & Trading (EU)
GPS Capital Markets
Jeroen Overmaat
Sales Manager, the Netherlands
Kyriba
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