Functions Of Treasury Department | Financial Management

hey guys you're watching studies at 4

and in this video we'll be talking about

the functions of Treasury Department so

what is the Treasury Department it is

basically a department in a company

which administers a takes care of all

the financial assets as well as the

holdings that the company has so you can

see here in the diagram here so chart

that financial assets include bank

deposits stocks pension funds bond

accounts receivables and the investments

the various investments and the physical

assets or you can say holdings could be

some real estate livestock Jim Joyce

collect collectibles metals and in case

of company's holdings could be the share

or the phoning or some other company

right it could be that also so the

functions of Treasury Department is to

ensure proper usage storage and risk

management of liquid funds liquid funds

meals that are convertible into cash

really fast

so as to ensure that the organization is

able to meets its obligations collect

its receivables and also maximize the

return on its investments towards this

end Treasury function will be divided

into the following so the Treasury

Department has the following pipe

functions the cash management function

the currency management function the

fund management the banking functions of

corporate finance function we will

discuss these pipe functions in detail

further so the first function is cash

management is the efficient collection

and payment of cash collection and

payment of cash both inside the

organization and to third parties

payment of cash to employees inside the

organization and to third parties the

suppliers who you are purchasing

materials from is the function of credit

Orbach Treasury Department so virtually

normally managers surplus funds in an

investment portfolio as well if you have

surplus funds the Treasury Department

besides where the money should be

vested right so the next one is the

currency management the Treasury

Department manages the foreign currency

risk exposure of the company it advises

on the currency to be used when

invoicing overseas sales so for example

if you are in India and your businesses

and you make a sale to a company which

is in Russia so you will receive Russian

currency so this the partner specially

Department advises on how to receive the

currency where to use it how to convert

it etc system it also manages any net

exchange exposures in accordance with

the company policy right now coming on

to fund management Treasury Department

is responsible for planning and sourcing

the company's short medium and long term

cash needs so the Treasury Department

has to title to the requirement of the

company regarding fun short medium and

long term it also participates in the

decision on capital structures capital

structure means the equity and debt mix

in the company and it also forecast

future interest in foreign currency

rates right now banking since short term

finance can come in the form of bank

loans or through the sale of commercial

paper in the money market through bank

loans short term finance could be to

look bank loans or through commercial

papers commercial tables are bonds type

of bonds which are issued by big

companies for a short period of time for

about nine to 365 days in the money

market therefore Treasury Department

carries out negotiations with bankers

and acts as the initial point of contact

with them so Treasury Department is a

mediator between the company and the

bankers for taking back payments what

issuing or commercial papers of sale of

commercial papers right coming on to

corporate finance Treasury Department is

involved with both acquisitions meaning

that you are acquiring

a company purchasing a company and this

is this investment active built within a


this investment activities within a

group meals liquidation of the company

shutting down you can say laying off of

staff and in addition it is responsible

for invest in investor relations adverse

investor means that your equity

shareholders or preference shareholders

the relations between the big investors

for example there are many many mutual

funds who invest in companies so they

would be having a stake in the company

so you have to maintain relations with

the mutual funds otherwise they would

withdraw their funds right so these were

the five main functions of the Treasury

Department let's have a quick review the

first was cash management the second

currency management cash currency cash

is currency then you have funds cash is

currency and it is fun and all the three

are available in the banks and the banks

also provide corporate finance so you

can learn in that manner you can create

a acronym for that so these are the five

functions thank you guys for watching

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