Top 5 Tasks of a Treasury Analyst

  • By AFP Staff
  • Published: 11/29/2022
Treasury analysts

Treasury professionals help shape the future of a company’s financial strategy.

Most importantly, they make sure there’s enough money to pay the bills. Beyond that, treasury professionals manage the financial risks of an organization and ensure there’s funding for new ventures.

How do you get started? The entry-level position for treasury is that of treasury analyst. Below, we’ve compiled the top five tasks of this position to give you an idea of what it entails.

Reconcile bank activity with error/dispute resolution

In other words, payment and bank account activity reconciliation. This is a process where you ensure all payments and activity are reviewed and applied correctly, making sure the records kept in the general ledger match the records of the bank account; timely follow-up is essential for audit purposes.

Why is it necessary to reconcile bank activity? It provides validation that all bank activity is properly accounted for. It can also help you avoid bank fees and show you patterns of spending and cash flow. When discrepancies occur, treasury analysts determine if the errors are internal or external (i.e., the bank).

The use of a treasury management system (TMS) is very helpful in ensuring accuracy, simplifying the process and automating a lot of the otherwise time-consuming portion of the task. How often you reconcile depends on the company. Larger companies prefer to do this daily, while smaller companies might opt for weekly or biweekly.

Set the cash position

The point of setting the cash position, which is typically done daily, is to establish the amount of cash an organization has available — or in the event of a deficit, where to draw upon for liquidity (in other words, ensuring the ability to meet current and future financial obligations in a timely and cost-effective manner).

For a small business with just a few bank accounts, setting the cash position should be relatively straightforward; however, for a multinational with accounts in multiple countries, it can be quite complex.

Similar to how the amount in your personal checking account determines how much money you can spend, the cash position is critical in determining a company’s ability to meet payroll, conduct debt servicing, make vendor payments, make acquisitions, monitor financial covenants and ensure compliance reporting. Without this information, the likelihood of making detrimental — and certainly uninformed — decisions rises exponentially.

Interface with the bank about bank service fees

Bank fees are an important spend that needs to be managed, as it is one of the only areas that directly results in tangible departmental costs. Done correctly, bank fee analysis can save the company tens of thousands — or even millions — of dollars off the annual cost of bank services.

Every month or on a predetermined basis, U.S. banks issue a cash management/account analysis statement, which is essentially an invoice of all the fees the company has paid that month. This is carefully reviewed with the knowledge of what the organization agreed to pay when the account was set up, as banks do make mistakes.

This statement also includes volume discounts, underutilized services, spiking fees, reversion back to standard rates, regional and international differences in fees and the timing of fees.

Utilize fraud prevention tools for payments

There are three primary vulnerabilities when it comes to payment fraud: technology, processes and users. Protecting access to the systems themselves — such as the enterprise resource planning (ERP), TMS and foreign exchange (FX) trading portal — is paramount and may be done in conjunction with or by Information Technology (IT). Treasury professionals also have a role in determining the course of action going forward in the case that fraud occurs.

In addition to system protection, treasury departments keep their organization safe from fraudsters by using two-factor authentication, establishing a central repository for documentation, reviewing audit trails, following the banks’ best practices and technology recommendations.

Treasury departments also need to keep up with the latest fraud tools. These are akin to the secondary authorization used to make payments from your personal bank account or PayPal. Companies have more fraud tools in place than individuals because they typically make more payments and use various types of payments such as checks, wires, ACH and card payments. These payment types contain additional security features to prevent outside parties from fraudulently using their bank information to make payments.

Keeps policies and procedures current

A treasury department is only as good as its policies and procedures. With advancements in technology, as well as rapidly escalating threats like data breaches and payments fraud, it’s important to keep treasury policies current. At the same time, policies also need to remain broad enough that they only need to be updated for major needs.

Treasury takes the lead on policies and procedures involving cash management and payments and risk management (cyber risk and FX risk management). Similar to how you monitor the flows into and out of your own bank account — and call the bank if you see something you don’t recognize — there are similar procedures in place at companies.

Policies are instituted to ensure that everyone conducting a particular task knows how to do it correctly. Having proper controls in place prevents people from accidentally putting the company at risk. It’s also important for compliance reporting.

Treasury is one of the fastest-growing fields in the world. Learn what a career in treasury could look like for you.

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