Treasury and Cash Management

Introduction:

Treasury management is the management of an organization’s collection, concentration, disbursement, investment and funding activities as well as the process of dealing with financial risk issues. The very first function of treasury management is cash management which is the corporate process of collecting and managing cash as well as the use of cash for short-term investing. This makes cash management a key component of a company's financial stability and solvency.

This course provides professionals with an overview of the modern role and practices of treasurers in cash management, cash forecasting, treasury funding and investing. Also, this course discusses the application of the latest technologies to cash management while abiding by a certain set of policies and procedures.

Targeted Groups:

• Treasury Professionals
• Financial Professionals
• Finance Managers
• Corporate Controllers
• Financial Controllers
• Chief Accountants
• Accounting Managers
• Senior Accountants
• Banking Professionals
• Back-Office Managers
• Traders and Dealers
• Finance Regulators
• Corporate Business Professionals

Course Objectives:

At the end of this course the participants will be able to:

• Describe and explain the roles of corporate treasury management and the treasury function
• Apply up-to-date practices covering cash management techniques
• Draft a cash flow forecast and establish cash and loan forecasted balances at specific dates
• Develop a practical understanding of treasury investment and products along with their risk and return
• Assess effectiveness of treasury policies and procedures for the organization
• Implement technology related to treasury operations

Targeted Competencies:

• Treasury management
• Cash management
• Forecasting
• Risk analysis
• Risk management
• Equity valuation
• Fixed income valuation
• Developing treasury policies and procedures
• Assessing technology in treasury operations

Course Content:

Unit 1: Introduction to The Treasury Function:

• Definition and responsibilities of the treasury function
• Treasury function as part of organizational structure
• Role of treasury professionals
• Strategic challenges for treasurers in organizations
• Risks surrounding the treasury function:
• Market risks: interest rate risk, FX risk, equity price risk, commodity price risk  
• Liquidity risk
• Credit risk
• Other risks
• Developing a risk heat map for the treasury function

Unit 2: Cash and Liquidity Management:

• Asset and liability management versus treasury management
• Reasons for holding cash: transaction, precautionary and speculative
• The optimum cash balance:
• Baumol’s model
• Miller-Orr model
• Managing and accelerating collections
• Managing and decelerating disbursements
• Ratio analysis for decision making
• Days sales outstanding versus credit term
• Days inventory on hand versus lead time
• Days of payables
• Cash conversion cycle

Unit 3: Cash Flow Forecasting:

• Purpose of cash flow forecasting
• Issues and opportunities in cash flow forecasting
• Types of forecasts: purpose, horizon, frequency
• The forecasting process
• Data identification and organization
• Selection and validation of the forecasting method
• Forecasting methods
• Short-term cash flow forecasting method
• Medium and long-term forecasting
• Statistical methods in forecasting

Unit 4: Treasury Funding and Investing:

• Managing short-term borrowing
• Short-term funding alternatives
• Long-term debt financing
• Short-term interest rates versus long-term interest rates
• Loan agreements and covenants
• Credit rating agencies
• Bonds as a tool for long-term investing and funding
• Managing short term investments
• Short-term investment policies
• Securities safekeeping and custody services
• Long-term equity investments and stocks
• Equity valuation techniques
• Derivatives markets and hedging

Unit 5: Treasury Policies and Procedures:

• Procedures development and implementation
• Liquidity policy
• Bank accounts and financial services authority policy
• Payments policy
• Wire transfer policy
• Collection and concentration policy
• Payment cards policies
• Outsourcing policy
• Financial risk management policy
• Regulatory compliance policies
• Financing and funding policies
• Treasury systems policy
• Sample short-term investment policy

Unit 6: Technology in Treasury Operations:

• Information security for treasury
• Information management technology platforms
• Technology management systems (TMS) functionalities
• Cash management
• Spreadsheets
• Payments
• Debt and investment transactions
• Main TMS vendor profiles
• Phases for TMS selection process
• Focus points to implement TMS
• E-commerce and treasury
• Basics of e-commerce
• Electronic Data Interchange (EDI)
• Electronic Bank Account Management (eBAM)
• Mobile banking and mobile payments
• Application program interfaces (APIs)
• Blockchain
• Treasury-related fraud