The treasurer is the person in the company in charge of managing everything related to the movement of capital, cash flow, monetary flow or "cash flow". It manages everything related to the movement of money within the company. It includes activities such as: banking, payment to Suppliers, employee salary, charge for activities carried out by the company, etc ... In short, everything that involves the entry or exit of money.
Do not confuse the concept of treasury with the area of accounting of the company. They are two different areas. The treasurer records the movement that is made in the company (payment or collections), in addition to controlling compliance with that movement is carried out. On the other hand, the personnel responsible for the accounting of the company will be in charge of registering said movement in the books so that there is evidence of it and have a follow-up of what we are owed and what we have received.
Functions of the treasurer
Among the most outstanding tasks of the treasurer we can find:
- Creation of collection and payment policies that ensure the proper functioning of the movement of capital in the company.
- Control of the monetary resources available to the company.
- Corrective measures to control deviations or atypical activities that occur.
- Control of compliance with the flows that are produced, whether they are collections or payments.
But ... when is corporate treasury good or bad? To measure the treasury of a company, the following ratio can be used:
Liquidity Ratio = (Current asset / Current liabilities) x 100
El liquidity ratio measures the ability to make liquid money to meet immediate payments. Such a ratio would be good if it does not exceed 75%. In case it exceeds it, it could indicate that the company may have problems when it comes to dealing with immediate payments.