Treasurers or corporate treasurers are the mainstays of any company or organization’s financial infrastructure. This position requires a substantial amount of skill, financial knowledge and experience, and involves dealing with numerous types of business and financial professionals. Interpersonal skills and a strong professional appearance are necessities. The position of treasurer involves a great deal of responsibility, and ultimately, treasurers are responsible, in part, for the success and solvency of a business. Under most circumstances, a corporate treasurer is responsible for the management of a large and diverse group of individuals that usually includes higher-level executives. Treasurers work in every industry and require a unique combination of education, experience and innate skills. CFOs often have treasurer duties.
Job Description and Duties
A corporate treasurer handles every aspect of the financial life of a corporation or organization. These professionals are responsible for financial planning, establishing budgets and making vast investments on behalf of their corporations or boards of directions. In some companies, a treasurer often sits on the board of directors. As a part of his work, a treasurer must forecast future financial shifts and happenings, and establish procedures and policies that glean the most benefit from these predictions.
Treasurers are also largely responsible for managing risk. In any corporation, risks related to liquidity, currency, interest rates, credit and operations are all experienced to different degrees depending on the size and revenue of each respective company. Liquidity risk is one of the most significant risks a corporate treasurer may face. In this position, an individual deals with a corporation’s excessive expenses, its inability to access adequate funding from external sources such as banks and its inability to bring in an amount of revenue that does not cover the firm’s obligations. A lack of liquidity has put an end to a large number of large and small corporations.
For the treasurer of a company that deals extensively in exporting goods, a currency transaction risk can occur during the period when a transaction is begun and completed, and the proceeds from such a transaction are translated from a foreign currency into the domestic currency.
Another type of currency risk that is often difficult for treasurers to manage involves favorable currency translation. If, for example, two companies from different countries produce and sell similar goods, competition between the two is high as each attempts to return the most profit and complete the most sales. The results from sales depend entirely on how each country’s native currency moves against the currency of the country to which goods are being sold. Treasurers are often involved in tactical plans to keep competition high and bring in greater profit, such as relocating manufacturing plants to match the cost base of the competitor’s currency. This step can have potentially negative implications for a company and is done after extensive research and consultation with the company’s treasurer.
During the course of operations, most corporations need to borrow money. Borrowing money at variable interest rates costs the company less if interest rates fall in the market but costs more when rates in the market swing upward. Failure to pay interest can turn into a liquidity problem for a company and most likely leads to problems obtaining funding in the future. Treasurers must understand these risks and advise a company on the best course of action.
To address any and all potential financial risks, a treasurer is responsible for creating board-approved policies that manage these risks. These policies define what methods may be employed by the treasurer, and other authorized personnel, to avoid or fix potential risk problems.
Education and Requirements
A corporate treasurer must have at least a bachelor's degree, typically in accounting and sometimes in finance as well. Emphasis is placed on accounting skills and management of finances. Treasurers must also be adept at risk analysis and management; studying and understanding cash flow models and proper documentation; and reporting of all financial information. Some corporations prefer or require that any applicant for the position of treasurer hold a Certified Public Accountant (CPA) credential, and many firms will not consider an applicant unless he holds a master’s degree. The Association for Financial Professionals also issues certified treasury professional certifications, and many individuals hoping to get hired as corporate treasurers obtain this certification during mastery education. Applicants for this position must also gain extensive experience in the field, usually obtained in positions similar to a corporate treasurer or in a position as a corporate treasurer in a smaller firm or organization.
Education does not stop once an applicant is hired. Continued education along the way is considered a part of the position. All corporate treasurers must remain current of all applicable changes to regulations, tax codes, and other rules and procedures that apply to financial instruments. This continued education is essential to any individual acting as the treasurer of an organization.
The first, and most obvious skill, is the ability to work effectively and comfortably with numbers. Attention to detail and time management are also essential skills. Individuals suited for positions as treasurers are also skilled at managing and being responsible for others and can communicate effectively. This means an individual applying for this position must work well with others and be able to give concise and constructive direction. Dealing with multiple tasks and many people on any given day also indicates an individual suited to a position as a treasurer must be able to multitask in an effective and timely way, and deal with significant stress and deadlines.
The average annual salary of a corporate treasurer depends on the size of the company and the industry and area in which the company operates. The range is expansive and difficult to pin down because of the vast diversity and combinations among these factors. According to Salary.com, the average national income of a corporate treasurer, as of 2015, is around $150,000. For larger corporations, the annual average salary is usually always six figures and typically ranges from around $110,000 to around $180,000. Smaller businesses generally offer treasurers substantially lower annual salaries in relation to overall revenue, with the average income being less than $100,000 per year. Again, the salary and any bonuses all depend on the size and revenue of the business that employs the treasurer, the region and state where the business operates, and the industry to which the business belongs.