treasury management

Treasury management is the administration of a company’s cash flow as well as the creation and governance of policies and procedures that ensure the company manages risk successfully.

Treasury management is the creation and governance of policies and procedures that ensure the company manages financial risk successfully. 

Because a primary function of treasury management is to establish levels for cash or cash equivalents so that a company can meet its financial obligations on time, treasury management is sometimes simply referred to as cash management. 

A treasury management system (TMS) is a software application or enterprise resource planning (ERP) software component that automates the repetitive steps needed to manage a company’s cash flow. A TMS, which can be managed in-house or purchased as a service from a third-party provider, consists of hardware, software and real-time data for cash positions, interest rates, payables, receivables and foreign exchange rates.

Some treasury vendors support a mix of messaging standards including BAI2, EDIFACT, Electronic Data Interchange (EDI), SWIFT FIN and SAP IDoc messages and ISO 20022.

This was first published in March 2012

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