Functional processes need to defined due to many reasons: Safety, efficiency and consistency. Especially Treasury processes have quite a high degree on complexity, because they are the "Main Station" where all the trains come in and leave the station (where the train station is in this metapher the company or group). Treasury connects Customers - Banks - Accounting - Management - Staff and Authorities.

A well structured Treasury Policy therefore shall consider following sections with the necessary respect and accuracy. When we introduce Treasury Policies at our customers, the framework looks like this:

Treasury Manual

This is the frame of the whole policy. You may compare it with an enhanced binder of a large book. This manual, same like all other parts of the Treasury Policy, is a guideline, process- and responsibility description and regulatory key element of the group's overall financial policy. Considered in the manual, i.e. the binder, are the general Treasury processes, responsibilities and reportings and how the policy itself is structured - and, last but not least, what the purpose and role of Treasury is.

1. Overview of the Group Treasury Function
1.1. General Principles
1.2 Treasury Functions and Responsibilities
1.3 Position withing the Group

2. Policies und Guidelines based on the Group Treasury Strategy
2.1 Treasury Master Agreement
2.2 Corporate Finance (evtl. incl. Capital Management)
2.3 FX and Risk- Management
2.4 Cash Management

3. Measurement, Reporting and Control
3.1 Liquidity Reserves
3.2 Liquiditäty- and Finance Reporting
3.3 Exeptional Reporting

The key element of the professional and meaningful Treasury policy is chapter 2. The specific Treasury items are managed separately, because on the one hand the requirements to a Treasury policy is not in all groups the same and on the other hand, with this specialization an utmost possible flexibility is ensured when single items need to be revised.

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2.1    Treasury Master Agreement 

This part is responsible for all legal matters. It is the frame-work for all kind of transactions, whether it is for settlements, loan-management, cash pooling, netting, power of attorney, what to do in case a party is in default and so on. 

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2.2    Corporate Finance 

Defines the tasks, duties and responsibilties for all kind of bank relationships, financing matters and financial competences.

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2.3    FX and Risk Management 

Gives guidance and regulates the processes for managing the group’s fx general issues and  in particular the foreign exchange risk. This is a separate policy.

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2.4    Cash Management 

This manual is responsible for the heart of every Treasury, because all kind of cash flows are going through the Cash Management. It defines the daily management of payments, cash pooling, netting, account management, short-term investments and -borrowings, interest rate matters etc.

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