Where is the department of treasury
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
group
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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