Treasury Management concerns the managing of the money that result from the processes that take place in an organization and keeping an eye on the exchange rates. Treasury management arose because of the growing complexity in making payments after the decentralization of Banking.
The controlling of cash flows is essential for the continuity of an organization. Important tasks of a Treasury department are managing debtors, creditors, cash flows and balances. The aim is to build up a financial structure that allows permanent access to the capital market so it ensures a high liquidity and profit. It is about the controlling of financial positions and the associated costs and risks, which relate to currencies, interest rates, credits, liquidity and solvency.
The primary functions are cash management, working capital management, corporate finance and interest rate- and currency management. Treasury departments are often split into Fixed Income (buying and selling of interest rate bearing securities), Foreign Exchange (buying and selling of currencies) and Capital Markets (trading in stocks).