Treasury management: The importance in strategic decisions
Posted: Mon Jan 20, 2025 3:45 am
Treasury management is fundamental to the success of any company, as it ensures efficient control of cash flow and directly influences strategic decisions.
Therefore, companies that have effective treasury management become less vulnerable to market fluctuations, as this practice involves daily monitoring of financial movements.
With good management, it is possible to identify financial imbalances in advance and ensure the working capital needed to maintain operations. However, this is only feasible if the processes are aligned poland whatsapp data with the company's strategic planning.
Read also: Finance professional: 4 tips to boost your career
In this article, we will explore the importance of treasury and how it directly connects to the results and sustainable growth of your business. Check it out!
Here you will find:
How does the treasury work?
How important is treasury management?
How to ensure efficient treasury management?
Invest in your career in finance!
How does the treasury work?
How the treasury works
The treasury plays a crucial role in financial management, with the aim of maximizing results, generating operating profit and increasing the company's equity. To this end, it directs cash flow in line with strategic planning, ensuring the efficient use of resources.
For example, if the goal is to increase working capital by 20% by the end of the year, this plan needs to be integrated into the company's strategic planning. Otherwise, it may be necessary to resort to expensive loans, which reduces the profit margin and makes results unviable.
Read also: 4 steps to a successful economic feasibility project
Poor use of financial resources, such as investing in low-liquidity assets when immediate liquidity is needed, can lead to a mismatch in values. In more serious cases, this error can even lead to bankruptcy.
How important is treasury management?
Treasury management is essential to a company's financial success and depends on three fundamental pillars: financing lines, financial investments and risk protection. When well managed, treasury ceases to be just a cost center and becomes a strategic business area.
Financing lines
These credit alternatives serve to meet the need for working capital, but selecting the wrong option can make the process more expensive for the organization, which makes business growth unfeasible.
In practice, it is up to the treasury manager to research the most efficient line with the lowest interest rate to avoid paying unnecessary extra costs that negatively impact business growth, profit generation and profitability.
Executive Education Saint Paul. Discover the courses!
Financial applications
These are investments that can be made to help the company achieve its goals more easily. The choice should consider the need for working capital and liquidity.
This means that, in this process, the manager needs to think about whether he will need a lot of cash in a short period of time and invest in a very short-term alternative, with a lower yield, but which offers the possibility of withdrawal when necessary.
Read also: Cash flow: Is it possible to have profit and loss at the same time?
On the other hand, if cash flow is good and financial resources can be retained for a longer period of time, the yield tends to be higher. However, strategic planning must define how long it will take to have access to that money.
Therefore, companies that have effective treasury management become less vulnerable to market fluctuations, as this practice involves daily monitoring of financial movements.
With good management, it is possible to identify financial imbalances in advance and ensure the working capital needed to maintain operations. However, this is only feasible if the processes are aligned poland whatsapp data with the company's strategic planning.
Read also: Finance professional: 4 tips to boost your career
In this article, we will explore the importance of treasury and how it directly connects to the results and sustainable growth of your business. Check it out!
Here you will find:
How does the treasury work?
How important is treasury management?
How to ensure efficient treasury management?
Invest in your career in finance!
How does the treasury work?
How the treasury works
The treasury plays a crucial role in financial management, with the aim of maximizing results, generating operating profit and increasing the company's equity. To this end, it directs cash flow in line with strategic planning, ensuring the efficient use of resources.
For example, if the goal is to increase working capital by 20% by the end of the year, this plan needs to be integrated into the company's strategic planning. Otherwise, it may be necessary to resort to expensive loans, which reduces the profit margin and makes results unviable.
Read also: 4 steps to a successful economic feasibility project
Poor use of financial resources, such as investing in low-liquidity assets when immediate liquidity is needed, can lead to a mismatch in values. In more serious cases, this error can even lead to bankruptcy.
How important is treasury management?
Treasury management is essential to a company's financial success and depends on three fundamental pillars: financing lines, financial investments and risk protection. When well managed, treasury ceases to be just a cost center and becomes a strategic business area.
Financing lines
These credit alternatives serve to meet the need for working capital, but selecting the wrong option can make the process more expensive for the organization, which makes business growth unfeasible.
In practice, it is up to the treasury manager to research the most efficient line with the lowest interest rate to avoid paying unnecessary extra costs that negatively impact business growth, profit generation and profitability.
Executive Education Saint Paul. Discover the courses!
Financial applications
These are investments that can be made to help the company achieve its goals more easily. The choice should consider the need for working capital and liquidity.
This means that, in this process, the manager needs to think about whether he will need a lot of cash in a short period of time and invest in a very short-term alternative, with a lower yield, but which offers the possibility of withdrawal when necessary.
Read also: Cash flow: Is it possible to have profit and loss at the same time?
On the other hand, if cash flow is good and financial resources can be retained for a longer period of time, the yield tends to be higher. However, strategic planning must define how long it will take to have access to that money.