Critical Treasury Tasks Every CFO Needs to Know About

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. 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.

Article Overview

Round Table Session: The Essential Treasury Functions Businesses Ignore
Distinction between the CFO and the treasurer
Key Roles and Responsibilities of a Treasurer Every CFO needs to know
How should a CFO and Treasurer ideally work together? Views by Partners and Experts
Conclusion

Round Table Session:
The Essential Treasury Functions Businesses Ignore

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.

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.

Distinction between the CFO and the treasurer

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.

Chief Financial Officer (CFO): The CFO is a senior executive responsible for overseeing the organization’s overall financial operations, providing strategic leadership, and ensuring compliance with regulations.
Treasurer: The treasurer manages the company’s cash flow, investments, and financial risk mitigation strategies, reporting to the CFO and focusing on the execution of financial strategies.

“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.

Further Insights from treasuryXL partners

CFO Responsibilities Beyond Treasury

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.

Trend Towards Closer Integration of CFO and Treasury Roles

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.

The Path from Treasurer to C-Suite

As highlighted by GPS, to rise from treasury roles to the C-suite, treasurers should expand their financial expertise, and sharpen skills in technology and data analysis. They must also build strong leadership and communication abilities, and actively engage in strategic discussions to transition from operational to executive responsibilities.

Key Roles and Responsibilities of a Treasurer Every CFO Needs to Know

Let’s then delve into the critical treasury tasks that every CFO should be aware of in their day-to-day business:

1. 1. Cash Management
    
    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.
  2. Risk Management
    
    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.
  3. Banking Relationships
    
    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.
  4. Treasury Operations
    
    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.
  5. Regulatory Compliance
    
    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

How Should a CFO and Treasurer Ideally Work Together?

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.

What do our Partners and Experts say?

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.”

GTreasury

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.

Ebury

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

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.

Treasurer Search

CFOs and treasurers should work together as strategic partners, focusing on working “on” the business rather than just “in” it, says Pieter de Kiewit of Treasurer Search. This means prioritizing long-term vision and strategic planning over day-to-day operations.

Treasurers should strive to be entrepreneurial within the Office of the CFO, leveraging their expertise in areas like cash flow planning and risk management to inform broader business strategies. Both roles should seek a balance between operational tasks and strategic thinking, potentially outsourcing certain tasks to free up time for more value-added activities.

Effective collaboration between CFOs and treasurers involves clear communication, leveraging modern technologies, and adapting to changing business environments. By working together in this way, CFOs and treasurers can drive financial strategy, manage risks effectively, and significantly contribute to the organization’s growth and success.

Click on the banner below to read more about how, as a treasurer, you can act as an entrepreneur within the Office of the CFO.

Pieter de Kiewit

Managing Director

Treasurer Search

Antonio Rami

Chief Growth Officer and co-founder

Kantox

Kantox

According to Antonio Rami of Kantox, the CFO and Treasurer should work closely together to develop and implement a comprehensive multi-currency strategy that enhances business performance. This collaboration involves jointly analyzing whether to hedge cash flows or balance sheet items, aligning their strategies with the company’s financial goals.

They must also address the challenges of volatile markets, including FX rate fluctuations and interest rate differentials, to effectively manage risks. By taking actionable steps supported by tools like Currency Management Automation, they can optimize their foreign exchange strategies, ensuring a robust approach to currency management that ultimately strengthens the organization’s financial health.

Effective risk management skills of the CFO go beyond tactical execution. By promoting collaboration, utilizing technology and the ability to nurture a culture of risk awareness, the CFO can close the gap between strategic vision and responsible financial decision-making.

Read more if you check all the boxes by clicking the banner below.

GPS

Effective collaboration between the CFO and Treasurer is essential to balance strategic and operational needs within the finance function, says Alex Youngman of GPS Capital Markets.

The CFO, who is focused on overarching financial strategy and investor relations, relies on the Treasurer to manage daily financial operations like cash flow, currency risk, and hedging. To optimize this collaboration, the Treasurer should provide timely and accurate data on cash positions and currency exposures, which the CFO uses to shape long-term financial plans and strategic decisions.

Advanced FX software can simplify this interaction by automating routine tasks, ensuring that both roles have access to real-time information, which supports effective decision-making and enhances overall financial stability. By aligning their efforts and leveraging technology, CFOs and Treasurers can better manage risk and drive financial performance.

Alex Youngman

Vice President of Sales & Trading (EU)

GPS Capital Markets

Conclusion

First of all, a special thanks to our partners for sharing their valuable insights on the topics with tresasuryXL. We couldn’t create this article without their help! However, the discussion around the roles of CFOs and treasurers reveals an essential truth.

Challenges often arise due to communication gaps and differing priorities.

CFOs need to recognize how vital treasury functions are for maintaining liquidity and managing financial risks, while treasurers must align their day-to-day management with the company’s long-term strategic goals.

The CFO’s scope is broad, involving strategic oversight and long-term financial planning across the entire organization. In contrast, the treasurer handles the day-to-day management of cash flow, financial risks, and banking relationships. This division ensures that the CFO can concentrate on overarching financial strategies and compliance, while the treasurer efficiently manages operational financial tasks.

Effective collaboration between these roles, supported by modern technology and clear communication, enables both to fulfill their functions seamlessly, ultimately driving the organization’s financial stability and growth.

For companies to thrive, finding the right balance between strategic oversight and operational management is essential. CFOs and treasurers should actively work together, leveraging their distinct expertise to navigate financial complexities and drive organizational success. By fostering open communication and aligning their efforts, they can achieve a more cohesive financial strategy and better overall performance.

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Critical Treasury Tasks Every CFO Needs to Know About

Article Overview

Round Table Session: The Essential Treasury Functions Businesses Ignore

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