Upfront: Treasurers Become Strategy Players

Treasurers are continually evolving from cash managers into strategic business partners, and a new survey conducted by the Bethesda, Md.-based Association for Financial Professionals (AFP) identifies two primary drivers of that trend: the need for corporations to leverage the diverse skills of their treasury department and heightened cross-functional attention to strategy in today's corporations. Survey respondents expect this trend to continue, with 92 percent anticipating treasury's strategic role to advance over the next five years.

"Today, treasurers fulfill a variety of roles, from that of managing trillions of dollars in cash each day to nonfinancial risk management to retirement and pension-plan administration," says Jim Kaitz, president and CEO of the AFP.

Nearly all treasury departments (95 percent) play a role in financial risk management activities, and three-quarters are active in nonfinancial risk management areas. Treasury is also a participant in certain nontraditional activities -- for example, acting as an internal financial consultant (90 percent); assisting in mergers and acquisitions (84 percent); ensuring compliance with SEC mandates (84 percent); planning for business continuity (74 percent); managing retirement and pension plans (70 percent); and managing other employee benefits (56 percent).

But treasury's involvement in strategy is not increasing at the expense of the function's traditional cash management and liquidity focus. Nearly half (48 percent) of treasury departments have maintained the same level of staffing for the past three years, and more than a third (37 percent) have expanded. Furthermore, a third of organizations report that they have increased the resources they spend on traditional cash management duties.

Twenty-seven percent of respondents say that their treasury operation has increased its use of outsourcing, and 63 percent have experienced an increase in the automation of traditional activities in order to streamline workloads.