Chapter Two

Treasury Design

THE CONCEPT OF TREASURY DESIGN is simple: to organise the Treasury function, its people and processes, working toward efficiency, elegance, and utility.

The starting point for Treasury Design is a study of the key performance indicators (KPIs), since the existence of Treasury and its structure has the eventual goal of achieving these performance goals. These KPIs were mentioned briefly in Chapter 1 and are further elucidated in the Toolkit in Part Five.

Since it is possible to have more than one route and model to achieve similar goals, other considerations come into play in designing an appropriately organised Treasury for the organisation. These considerations are:

  • Lower cost
  • Lower turnaround times for decision making and resolution
  • Higher degrees of control and wider net for control
  • Lower cost of capital and increased availability and diversity of capital
  • Legal environment of various locations
  • Accounting practices followed by the firm and accounting environment of the geographies in which the business is being done
  • Tax aspects
  • Automation required
  • Existing and future volumes
  • Growth and increase in business and geographies
  • Expectation of turbulence of competitor and industry landscapes

The three Treasury themes or functions—the management of transactions, balance sheet and liquidity, and risk—are the foundation for these KPIs and considerations.

Figure 2.1 shows the development of the Treasury Design process.

FIGURE 2.1 Treasury Design


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