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The Resource for the Global Finance Profession

Treasury Controls: 4 Tips to Help You Put Them in Place

  • By Andrew Deichler
  • Published: 2016-02-11

LONDON -- Fiona Crisp, treasury consultant for Crisp negotiations12Consultants and a former corporate treasurer, provided attendees at the ACT Cash Management Conference with four tips on instilling treasury controls in the treasury department.

First and foremost, Crisp was adamant that treasury controls need to come from the very top of the organization. “It starts with the board, and it starts very much with the corporate ethos, values, culture,” she said.

She noted that currently, there are still many companies where that type of culture is lacking. However, as a consultant, she is frequently asked by board members one particular question: “How can, and can the cash get out of this business?” So the concern is there, but there needs to be follow through, from the board, all the way down to the treasury department. She advised treasurers to work closely with human resources when hiring treasury staff members to make sure that new hires “live and breathe” that culture.

After the board sets the general policies for treasury, it’s time for treasury to implement its own internal controls. Perhaps the most important one of these is segregation of duties. “Those will start with making sure you have the basic four eyes principle, that no one person can do everything for any type of transaction,” Crisp explained.

Crisp noted that segregation is particularly difficult when it comes to small treasury departments. “When you start with a treasury team of only two or three, it starts to become quite difficult, so you’ve got to be a little more innovate then and say, ‘Who else do you have in the organization that can help you put in place that segregation?’ That’s why it’s so important to have good IT behind you, because IT can help you put in place that segregation,” she said.

Next come the “fundamental, opportunistic” controls. “You have to do reconciliations,” Crisp said. Although she acknowledged that reconciliations are tedious, they are nevertheless necessary. “You can find people who love to do it. And if you can find them, take them and keep hold of them, because they need to be able to actually understand the difference between a euro and a U.S. dollar when they’re looking at a payment—all sorts of things like that,” she said.

Reconciliation is the next key to sound treasury controls. Crisp noted that it can be difficult to find staff members who want to engage in the tedious process that is reconciliation, but it is something that needs to be done. On the off chance treasury finds an individual who wants to do reconciliation and does it well, “hang onto them!” she emphasized.

The last control Crisp identified was reporting. “Whatever you’ve done, you’ve got to make sure that everyone knows what’s happened,” she said. “That is a really valuable internal control.”

Copyright © 2016 Association for Financial Professionals, Inc.
All rights reserved.

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