Cash Forecasting
Cash forecasting is the process of obtaining an estimate or forecast of a company's future financial position. The primary goal of treasury is to ensure the organization has enough cash to meet its obligations over a certain time period.
Liquidity Management
Liquidity management is the strategy an organization employs to refine, expand and secure its liquidity. In other words, making sure cash is in the right place at the right time.
Why is this important? The health of an organization is measured by its liquidity, which may equate to how quickly it can access the debt/capital/loan markets and/or how much cash it has on hand (short-term). Either way, it’s about an organization’s ability to quickly and efficiently pay off its debt and short-term liabilities (e.g., payroll).
Technology in Treasury
Treasury Management
Treasury management is the process of overseeing a company's financial resources (including cash, assets and liabilities) to achieve the company’s strategic objectives.
Treasury management focuses on optimizing the use of monetary assets, managing daily liquidity and risk, and ensuring sufficient cash reserves to sustain ongoing operations. By guaranteeing fund availability, treasury management enables the execution of strategic initiatives aimed at achieving the organization's goals.
Working Capital Management
Financial Operations
Payments
A payment is the transfer of monetary value from one party to another, either in cash or noncash form.
Cash payments are made through the exchange of physical currency, while noncash payments usually involve transferring value between bank accounts via payment systems. Banks facilitate these transfers for their customers through multiple electronic and paper-based systems, such as Fedwire and ACH. Newer noncash payment methods, like mobile payments, transfer value between virtual accounts held by the payment service provider.
Payments Fraud
Payments fraud is one of the principal challenges organizations and businesses face today. Payments fraud is the illegal or unauthorized use of payment instruments — including credit and debit cards, checks, wire transfers and online payment platforms — to obtain financial gain. The umbrella of payments fraud encompasses a wide range of fraudulent activities, including credit card and check fraud, phishing and account takeover.
Business Performance Management
Business Performance Management (BPM) is a systematic approach to measuring indicators for effective management. It facilitates continuous improvement through planning, checking the work and making changes to the plan as necessary.
Capital Budgeting
Capital budgeting is the process organizations use to evaluate whether or not to fund major projects or investments intended to increase cash flow or advance strategic objectives. It involves the planning and analysis of investment in long-term assets such as new or replacement machinery, new plants, products or R&D.
The goal of capital budgeting is to determine whether an investment or project is worth pursuing, and to ensure the company's capital resources are efficiently allocated, as these assets require a considerable amount of funding and are not easily liquidated.
Financial Modeling
A financial model is a representation of the expected financial performance of an organization, product or asset. It simulates the potential outcomes of decisions or scenarios by defining assumptions about the world, expected performance, and operational and financial relationships.
A financial model estimates the financial outcome of questions such as, how much money will we make this year? Is this investment a good idea? How much risk are we taking?