## Fundamental Tasks of Treasury Department

### The Five Core Functions

#### 1. Cash Management

#### 2. Currency Management

Manages foreign currency risk exposure of the company.
In a large multi-national company, the first step is to set off intra-group indebtedness.
Uses matching receipts and payments in the same currency to save:
Transaction costs
Losses from unfavorable exchange movements

#### 3. Fund Management

Plans and sources the company's short, medium, and long-term cash needs.
Temporary investment of surplus funds by mapping the time gap between funds inflow and outflow.

#### 4. Banking

Maintains good relationships with bankers (critical for credit lines, FX, advisory).
Negotiates with bankers on:
Interest rates
Foreign exchange rates
Acts as the initial point of contact with banks.

#### 5. Corporate Finance

### Mnemonic: CCFBC — Cash, Currency, Funds, Banking, Corporate finance

Worked example

### Example 1

Practical Snapshot: A treasurer at a multinational on a typical day:

Morning: Reviews overnight cash positions across 12 bank accounts (Cash Mgmt).
Mid-morning: Sets off USD payables in EU subsidiary against USD receivables in Asia subsidiary (Currency Mgmt).
Afternoon: Negotiates a 6-month working capital facility (Banking).
Evening: Briefs CFO on a planned bond issuance (Corporate Finance).

⚠️ Common exam mistakes

Listing only cash management and ignoring the four other equally important functions.
Forgetting intra-group netting as a key currency management technique.
Confusing treasury with accounting — treasury is forward-looking and market-facing.

Reference:

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Functions of Treasury Department

Worked example