Introduction
Treasury is the department of an organization that deals with cash and financial management (Ogilvie 34). Its objective is to ensure prudent management of the organization’s funds. The department is usually headed by the treasurer. The roles of the cashiers and the tellers also fall under the treasury department. This paper focuses on best practice in the treasury department. The functions of the cashiers, tellers and the treasurers will be illuminated.
Functions of the Treasury Department
The treasury department is associated with the following functions. First, it is responsible for cash management. This involves maintaining the optimal level of liquidity in the organization (Ogilvie 41). The tasks associated with this role include cash collection, making payments and managing bank accounts. Second, the department is responsible for financial management. The main tasks in this case are risk management and investments.
The risks to be assessed include “exchange rate risks, interest risks and security over cash” (Bragg 79). The suitability of investment options must also be evaluated before the actual investment. Third, the department is responsible for providing funds for the organization. This is done by arranging for loans and other sources of capital. Finally, the department is responsible for asset management. It particularly assesses asset values in order to identify the ones to be replaced.
Best Practice: Head of Treasury Department
In order to effectively head the treasury department, the incumbent treasurer should consider the following competencies.
Making investment decisions
He or she should have a good knowledge of various financial products. This helps in making the right investment decisions.
Risk management
Risk management skills are also very important since they help in avoiding losses attributed to ignorance and negligence.
Market intelligence
The treasurer should be informed of the dynamics or trends in the financial markets. The information about the market helps in planning for the organization’s funds (Bragg 81).
Leadership skills
The treasurer should be able to delegate tasks and train his juniors. This helps in improving efficiency, accuracy and productivity of the junior officers.
Best Practices in Treasury Department: Retail Firms
Financial management within a retail chain should focus on the following factors. Security should be emphasized in order to minimize cash theft. This is based on the fact that there are numerous points of handling the cash and this increases the risk of theft. Multinational retail chains like Wal-Mart must always asses the exchange rate and interest risks in order to avoid the loss attributed to exchange rate fluctuations (Bragg 92). They should also adopt a centralized financial management system. The system should be supported by effective information and communication technology in order to improve efficiency (Bragg 97).
International retailers such as Wal-Mart should be keen on financial compliance requirements of the countries they operate in. The international financial accounting standards should be the benchmark. Cash management should focus on maintaining high liquidity levels since retail stores need a lot of cash for making change and urgent payments. The cash collection system should also be efficient in order to reduce long queues at the check-off points.
Functions of Cashiers and Tellers: Best Practice
Cashiers are mainly responsible for handling cash transactions (Fabozzi 93). They usually accept payments or make payments. They also assist in reconciling the sales records in order to ensure that the received cash is equivalent to the sales totals. Tellers are usually found in the banking industry and their duties include the following. They are responsible for customer services activities such as answering enquiries. They also handle cash transactions such as deposits and withdrawals (Fabozzi 107). In some case, they are responsible for sales activities.
Best practice in cashiering can be achieved as follows. The cashier should be able to identify and avoid the risks associated with handling cash. They should have a clear understanding of the financial system or software they are using in order to avoid making errors (Fabozzi 112). This can be achieved through regular training. They should have good public relation skills in order to interact effectively with the customers. Finally, technical support should always be available to the cashiers in order to prevent errors.
Samples of Good Treasury Departments in the Middle East
NTUC Fair Price Ltd, a retail chain in Singapore, is an example of a firm associated with best practice in its treasury department. This is due to the fact that the firm has a centralized financial management system that links all its 180 stores (Lillie 17). It uses an effective accounting software that facilitates, cash management, risk management, compliance and financial management (Lillie 18).
Conclusion
The above discussion indicates that treasury is the department of a firm that manages the financial resources. The main functions of the department include “cash management, financial management and asset management” (Bragg 90). Best practice in treasury calls for centralized financial management and efficiency improvement through automation. Besides, compliance and internal controls should be emphasized. Cashiers and tellers are mainly responsible for handling cash transactions. Best practice in cashiering calls a clear understanding of the financial management system. Besides, the cashiers should focuses on offering excellent customer services by improving their public relation skills.
Works Cited
Bragg, Steven. Treasury management. Hoboken, NJ: John Wiley and Sons, 2010. Print.
Fabozzi, Frank. Cash mangement. New York: John Wiley and Sons, 2000. Print.
Lillie, Ken. “The treasurer’s toolbox.” Journal of Corporate Treasury Management 4 (2010): 15-21.
Ogilvie, John. Treasury management. New York: Kogan Page, 1999. Print.