Essentials of Managing Treasury E-Book

Karen A. Horcher

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Essentials Series
• Sprache: Englisch

Seitenzahl: 292

Veröffentlichungsjahr: 2011

Beschreibung

ESSENTIALS OF MANAGING TREASURY Treasury is the financial hub of an organization-a hub with many spokes. This concise reference describes each functional area within treasury and includes guidelines for best practices and revelant technologies. With tips and techniques, it provides a practical overview of treasury and its relationship to every part of an organization. "Karen Horcher enjoys a well-earned reputation as an expert in her field, having both written and taught financial seminars for the Treasury Management Association of Canada (TMAC) for the past seven years. Her many years of experience as a front-line banker lend credibility to her work. Karen is justly appreciated for her ability to make complex financial concepts easy to understand." -Blair McRobie, Executive Director Treasury Management Association of Canada "Essentials of Managing Treasury provides an excellent perspective on the history, breadth, and current trends in treasury management. The reader can quickly grasp the 'real world of treasury management' and the practical and strategic issues faced by treasurers and financial professionals today." -Brian McArthur, Vice President Treasury Management, Royal Bank Financial Group The Wiley Essentials Series-because the business world is always changing...and so should you.

Leseprobe

Table of Contents

Essentials Series

Title Page

Copyright Page

Dedication

Preface

Acknowledgments

CHAPTER 1 - Introduction

Background

What Is Treasury?

Functions of Treasury

Treasury Community

Treasury and the Organization

Summary

Notes

CHAPTER 2 - Cash Management

What Is Cash Management?

Cash Forecasting

Foreign Currency Cash Forecasts

Cash Receipts and Disbursements

Cash Aggregation

Lockboxes

Global Cash Management

Cash Management Checklist

Summary

Notes

CHAPTER 3 - Liquidity Management

Introduction

Money Market

Short-term Investment Management

Managing Cash Shortfalls

Summary

Note

CHAPTER 4 - Foreign Exchange Management

Foreign Exchange Market

Foreign Exchange Exposure

Foreign Exchange Basics

Foreign Exchange Forwards

Currency Futures

Swaps

Foreign Exchange Options

Group of 31 Report

Summary

Note

CHAPTER 5 - Interest Rate Management

Introduction

Exposure Reduction

Interest Rate Basics

Forward Rate Agreements

Interest Rate Futures

Interest Rate Swaps

Interest Rate Options

Summary

Note

CHAPTER 6 - Treasury Risks

Introduction

Interest Rate Risk

Foreign Exchange Risk

Commodity Risk

Credit Risk

Operational Risk

Liquidity Risk

Other Risks

Risk Measurement

Sensitivity

Scenario Analysis

Value-at-Risk

Credit Risk Measurement

Operational Risk Measurement

Summary

CHAPTER 7 - Treasury Technology

Introduction

Common Treasury Technologies

Planning, Selecting, and Implementing Treasury Software

Summary

CHAPTER 8 - Financial and Regulatory Influences

Introduction

Financial Institution Relationships

Relationship or Account Manager

Financial Institution Developments

Accounting and Regulatory Initiatives

Summary

Notes

CHAPTER 9 - Operational Considerations

Introduction

People

Processes

Systems

Special Issues in Managing Operational Risk

Operational Management

Summary

Note

CHAPTER 10 - Treasury Management

Introduction

Centralizing Treasury Functions

Governance

Treasury Practices

Risk Management

Trends in Treasury

The Future

Summary

Appendix

Index

Essentials Series

The Essentials Series was created for busy business advisory and corporate professionals. The books in this series were designed so that these busy professionals can quickly acquire knowledge and skills in core business areas.

Each book provides need-to-have fundamentals for those professionals who must:

• Get up to speed quickly, because they have been promoted to a new position or have broadened their responsibility scope

• Manage a new functional area

• Brush up on new developments in their area of responsibility

• Add more value to their company or clients

Other books in this series include:

Essentials of Accounts Payable, Mary S. Schaeffer

Essentials of Balanced Scorecard, Mohan Nair

Essentials of Capacity Management, Reginald Tomas Yu-Lee

Essentials of Capital Budgeting, James Sagner

Essentials of Cash Flow, H.A. Schaeffer, Jr.

Essentials of Corporate Performance Measurement, George T.

Friedlob, Lydia L.F. Schleifer, and Franklin J. Plewa, Jr.

Essentials of Cost Management, Joe and Catherine Stenzel

Essentials of Credit, Collections, and Accounts Receivable, Mary S. Schaeffer

Essentials of CRM: A Guide to Customer Relationship Management, Bryan Bergeron

Essentials of Financial Analysis, George T. Friedlob and Lydia L. F. Schleifer

Essentials of Financial Risk Management, Karen A. Horcher

Essentials of Intellectual Property, Paul J. Lerner and Alexander I. Poltorak

Essentials of Knowledge Management, Bryan Bergeron

Essentials of Patents, Andy Gibbs and Bob DeMatteis

Essentials of Payroll Management and Accounting, Steven M. Bragg

Essentials of Shared Services, Bryan Bergeron

Essentials of Supply Chain Management, Michael Hugos

Essentials of Trademarks and Unfair Competition, Dana Shilling

Essentials of Managing Treasury, Karen A. Horcher

Essentials of Managing Corporate Cash, Michele Allman-Ward and James Sagner

Essentials of XBRL, Bryan Bergeron

For more information on any of the above titles, please visit www.wiley.com

Portions of this work have been used from Essentials of Financial Risk Management, Karen A. Horcher; Copyright © 2005, Karen A. Horcher. Reprinted with permission of John Wiley & Sons, Inc.

This book is printed on acid-free paper.

Copyright © 2006 by Karen A. Horcher. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax [phone], or on the web at www.copyright.com. Requests to the publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax [phone], or online at http://www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation.You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.

For general information on our other products and services, or technical support, please contact our Customer Care Department within the United States at 800-762-2974, outside the United States at 317-572-3993 or fax [phone].

Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books.

For more information about Wiley products, visit our Web site at http://www.wiley.com.

Library of Congress Cataloging-in-Publication Data

Horcher, Karen A.

Essentials of managing treasury / Karen A. Horcher. p. cm.

Includes index.

ISBN-13: 978-0-471-70704-2 (pbk.) ISBN-10: 0-471-70704-X (pbk.)

1. Cash management. 2. Finance. I.Title.

HG4028.C45H67 2006

658.15’244--dc22

2005019110

For my dear friend Ashley—you are greatly missed.

Preface

The subject of treasury management is both broad and deep.Treasury is being revolutionized due to new services and technologies, some of which were only ideas a short time ago. However, technology does not change the nature of treasury. It is still a role that requires proactive risk management and due diligence in the collection and stewardship of organizational assets.

Although there are excellent information sources available on the subject of treasury, this book is designed to be a treasury primer.As a result, it focuses on the major issues and considerations within the evolving world of treasury.

Acknowledgments

There are many individuals who have provided me with opportunity and knowledge. The Treasury Management Association of Canada, through Blair McRobie and his team, as well as his predecessor John Bumister, have been great supporters and have worked hard to further the treasury management profession.

I am very grateful to a number of treasury friends who provided me with guidance and perspective on various matters. In particular, Brian McArthur, Kathy Klopfer, Melanie Rupp, Nick Shepherd, and Peter Weddigen took time out of their busy schedules to provide me with feedback and ideas. Steve (“back to Africa”) Farago was quick to respond from an exotic locale. In addition, Stephanie Sharp and Bernice Miedzinski have, over the years, generously provided me with opinions and advice on so many topics. Finally, I am most appreciative that my clients permit me to become involved, in a small way, with their fascinating businesses.

My sincere thanks to Sheck Cho and his team at Wiley for both support and opportunity. And special thanks are reserved for Paul, for his steadfast support through the more demanding parts.

CHAPTER 1

Introduction

After reading this chapter, you should be able to:

• Appreciate the historical impact of past events that have shaped the form and function of today’s treasury.

• Understand the component activities of treasury.

• Review the various functions of treasury and how they interact with other parts of an organization.

Background

Over the past several decades, the financial market environment has changed dramatically. Financial market volumes are larger, and news travels more quickly than at any time in history. Governments have always come and gone, crises have erupted, but today the information and implications are almost instant. Events that occur anywhere in the world can impact an organization within minutes.

As a result, significant energy and resources today are spent managing the financial implications of internally generated strategies and external events. The historical importance of past events has shaped many of today’s treasury activities.

Changes in Financial Markets

Financial markets have changed over the past few decades. A number of factors have contributed, including long-term changes in inflation and interest rates, government debt and deficits, and the increasingly global markets where volatility in one market impacts others immediately.