Corporate treasury manages company cash, liquidity, funding, banking relationships, and financial market risks.
Corporate treasury is the function that manages a company’s cash, liquidity, funding, banking relationships, and financial market risks. Its central task is to ensure that the correct legal entity can meet obligations when due without taking unmanaged financing, currency, interest-rate, or counterparty risk.
| Responsibility | Decision question | Common evidence |
|---|---|---|
| Cash positioning | What cash is available today and where? | Bank balances, reconciliations, value-dated transactions |
| Cash forecasting | When will cash enter and leave? | Short-term forecast, receipts, payroll, tax, supplier, and debt schedules |
| Liquidity management | Can obligations be met under base and stress conditions? | Liquidity buffer, facilities, covenant and collateral headroom |
| Funding and debt | What source, term, currency, and maturity fit the need? | Debt schedule, term sheets, maturity ladder, all-in cost |
| Market-risk management | Which currency, rate, or commodity exposures should be retained or hedged? | Exposure reports, hedge policy, confirmations, effectiveness analysis |
| Banking and payments | Which accounts, banks, and controls support secure settlement? | Mandates, payment approvals, counterparty limits, service agreements |
| Surplus cash investment | How can temporary cash preserve principal and remain available? | Investment policy, maturity, credit, liquidity, and concentration limits |
Treasury may also support capital raising, insurance, pensions, guarantees, trade finance, and acquisition funding. Responsibility should be explicit because a broad job label does not establish who can approve or execute a transaction.
A company begins the coming week with $20 million of usable cash. Forecast items are:
Forecast ending cash is:
Base-case headroom above the minimum is:
Now assume a $6 million customer receipt is delayed one week. Ending cash falls to $10 million, creating a $2 million gap to policy minimum. Treasury could evaluate drawing a committed facility, moving legally available cash from another entity, rescheduling a discretionary outflow, or escalating collection. The appropriate action depends on cost, restrictions, operational priority, and approval.
The example shows why a forecast needs timing and scenarios. Annual profitability does not answer whether Wednesday’s payroll and Friday’s debt payment can settle.
flowchart LR
A["Bank and ledger positions"] --> B["Short-term cash forecast"]
B --> C["Liquidity and risk limits"]
C --> D["Funding, investment, hedge, or payment action"]
D --> E["Settlement and confirmation"]
E --> F["Reconciliation and forecast variance"]
F --> B
| Function | Primary focus | Important boundary |
|---|---|---|
| Treasury | Cash, funding, financial risk, and settlement | Does not own every accounting or investment decision |
| Controller | Accounting records, close, controls, and financial reporting | Recorded cash can differ from bank-available cash |
| FP&A | Budgets, forecasts, performance, and decision support | Forecast ownership should reconcile with treasury’s cash view |
| Corporate finance | Capital structure, financing, transactions, and valuation | Treasury often executes or manages resulting funding |
| Tax and legal | Tax position, entity authority, contracts, and compliance | Cash movement can create legal or tax consequences |
Corporate treasury decisions can involve derivatives, securities, banking contracts, tax, and legal-entity restrictions. This page is educational and does not provide treasury, accounting, legal, tax, financing, or investment advice.