How to manage a company”s treasury

The management of a company”s treasury is a task that cannot be uncontrolled or disorganized. A good treasury management will allow the company to be economically viable and to follow an adequate dynamic of decision-making in order to avoid or solve possible liquidity problems that may arise during the business year. It is very important to take it and plan it up to date and avoid liquidity and cash problems. In addition, it is essential to see the actual result of the activity and operation of the company. In the following article of a How we show you some key aspects to manage the treasury of a company properly.

Steps to follow:

1.The treasury management refers to take an exhaustive control of payments to suppliers, charges, negotiations with financial institutions and all actions and monetary operations are related to the cash flow of a company. It is also very useful to anticipate the money needs that you will need and at what time to avoid unnecessary expenses, valuing how much money we generate.

2.In general terms, there are a number of factors that are decisive in the task of optimally managing the treasury. The first of these is that every company must be up to date with the cash flow, that is, know what its liquidity is at all times as well as its bank accounts, payments and collections. To know the cash flow that is generated, you must calculate the difference between the money that enters (we charge) and leaves (payments).

3.Establishing and establishing efficient collection and payment policies is also a central point. Ideally, choose the payment and payment instruments that best suit us and each particular customer or supplier. At the beginning of setting up a company, the power to decide when to pay and collect will be low, although little by little it will always be earned and you can negotiate specific payment and collection methods for each provider and customer respectively.

4.It is also necessary to know exactly the sources of financing available, because if we know what their characteristics are, we can adapt the work mechanics to them and meet our needs. Mainly, we will work with financial institutions and banks, having at our disposal different products that can allow us to finance payments or advance our collections to gain liquidity, always looking for the option that best suits. Other options due to lack of liquidity would be public financing options, although the variety of products is smaller and we must adapt more.

5.Negotiation with financial institutions also has an important role. As entrepreneurs, we have the possibility of negotiating everything related to banking operations (commissions, interests, terms, etc.) based on our interests.

6.In large companies, treasury management is in charge and under the responsibility of a specialized accounting department. In the case of SMEs and freelancers it is also important to make a good treasury management and, although the appropriate knowledge is not available, we can use a very practical alternative that allows it to be done successfully. It would be a question of doing it with an excel sheet, adding the expected payments for the next months and subtracting the payments that must be made to see which months more money will be needed or how much will be earned.

7.Another option would be to have the services of an accounting manager, helping us to control in a personal way and with all kinds of facilities the accounting, fiscal and labor matters of our business.