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Really effective treasurers are business people first and then treasury technicians?

Three sessions at the Association of Corporate Treasurers Cash Management Conference in London on 12-13 February 2014 underlined the need to ensure that treasury’s working capital, cash management and operations complement and enhance the company’s goals and business model:

  • the cash management and working capital management in a leading electrocomponents company has been designed around the basic dynamics of their business - 550k products in stock, loads of suppliers, same day dispatch, low average order size and high gross margin. This required treasury to have tight control of cash management to release working capital whilst at the same time getting the business to buy into their approach. 
  • a leading provider of health food drinks which has a beautifully clear description of their purpose, vision and values. These are reflected in treasury’s drive to improve cash conversion whilst at same time ensuring reflecting the companies values including protecting their suppliers.
  • a large UK residential property company’s treasury is focused on creating new opportunities for the business by providing new flexible financial structures that enhanced the business. 

The key ingredient in all these companies was that treasury had to:

  • really know and understand business operations 
  • really know and understand business risk
  • ensure the business units bought into the approach.

CTMfile take: This sounds obvious, yet it requires, first, detailed understanding of the business dynamics, and, second, treasury  and cash management skills. Maybe, the really effective treasurers are business people first and then treasury experts?

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