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What is Treasury Management?


By: Christopher Reid, Director of Treasury Management

What is Treasury Management?

Similar to the overall financial industry, banking has become increasingly complex. At its simplest, banking is still deposits and loans. However, there is now a significant amount of specialization and uniqueness that accompanies these core functions. Much of this progression can be attributed to the changing needs of customers, especially businesses. As the economy evolves, banks must adjust their products and services to align with the expectations of their business clients. One of these adjustments has been the creation of treasury management departments. When the term treasury management is mentioned, it can sometimes cause curious looks and puzzled faces. Yet, this bank division can play a critical role in the day-to-day operations of a business.

What exactly is treasury management? Treasury management is a service-focused partner for businesses, helping with cash flow processes, mitigation of risks, financial analysis, and profitability. Ultimately, the goal of treasury management, through its various product and service offerings, is to provide a business with everything they need to operate at a premier level.

Some of the options and opportunities arranged through treasury management include:

  • Efficient and convenient electronic fund transfers with an Automated Clearing House (ACH)
  • Fraud detection tools like Positive Pay
  • Streamlining the payment and collection process with a solution like Lock Box

These are just a few ways a bank's treasury management team can improve and protect a business's financial situation. In addition, treasury management professionals should be viewed as consultants, providing critical financial knowledge and insights. They can troubleshoot cashflow bottlenecks, identify monetary risks, and mitigate potential losses through sound fiscal procedures and techniques. Further, a treasury management professional can help optimize the liquidity needed for a business's activities, resulting in higher overall earnings.

A quote from Mark McCormack, the former IMG executive, does a great job encapsulating the approach and important work of a treasury management team. Mark said, "All things being equal, people will do business with people they like; all things being unequal, people will do business with people they like." Similarly, companies and businesses bank with people they like and trust. A treasury management professional should be an advisor, considered part of a business's team, and relied upon for strategy. They also should be readily available to assist with unexpected financial situations and issues and constantly keep an eye out for opportunities to improve fiscal processes and operations. So, what is treasury management? Strategic bank products and services created for businesses and offered by professionals who can provide expert advice.

Headshot photo of Christopher Reid

Christopher Reid, Director of Treasury Management