# Treasury Management
## Meaning & Scope
Treasury management mainly deals with:
1. Working capital management, and
2. Financial risk management (including forex and interest rate management).
## Key Goals
- Maximise the return on available cash.
- Minimise interest cost on borrowings.
- Mobilise as much cash as possible for corporate ventures to earn maximum returns.
- Deal effectively in forex, money and commodity markets to reduce risks from fluctuating exchange rates, interest rates and prices (which affect profitability).
## Functions of the Treasury Department
1. Cash Management — Efficient cash collection and managing cash payments both within the organisation and to third parties.
2. Currency Management — Managing the company's foreign currency risk exposure; forward contracts can be used to buy or sell currency forward to minimise risk.
3. Fund Management — Planning and sourcing the company's short, medium and long-term cash needs; temporarily investing surplus funds by mapping the time gap between fund inflows and outflows; participating in capital structure decisions and forecasting interest and forex rates.
4. Banking — Maintaining good banker relationships; negotiating interest rates and forex rates; acting as the initial point of contact. Short-term finance may come via bank loans or sale of commercial paper in the money market.
5. Corporate Finance — Involvement in acquisitions and divestments within the group, and often responsibility for investor relations.