A treasurer has to maintain relations not only with banks, but with clients as well. Primarily key accounts (key clients), regulatory authorities, financiers, stock exchanges, etc..This is a critical function, after all everything depends on customer satisfaction and customer experience.
Managing relationships with banks is a key task and a one that has to be performed on daily basis – unlike relationships with regulatory authorities. Both are adequately important, but one cannot talk to the regulatory authorities on a daily basis. It will not be fruitful, it may actually hurt the relationships.
Managing bank relationships is a different ball game. Some banks for instance bring powerful balancesheets and the ability to provide substantial amounts of finance at short notice. The ultimate goal to be kept in mind is to create a win-win situation for all stakeholders.
There is no rule on capping the maximum number of banks an organization has to deal with
Relationships are never stable – especially professional relationships. Hence never keep relationship with only one bank. This may not be a very effective strategy.
Banks are continuously comparing the return from the total business generated by the relationship with the cost of capital required to support it. If banks consider the returns are inadequate they will reduce support to the company. As such, a treasurer needs to be continually open to new potential relationships, and ever sensitive to the possibility of any existing relationship withering.
Most banks that participate in major financing, always say that their returns from traditional bank lending are insufficient to cover the cost of capital required to support their commitment. As a result, they are in constant lookout for ancillary business from the company to subsidize the bank lending activities effectively. This is a real problem for many treasurers since many companies do not have that volume of ancillary business
2.8 Information Technology and Security:
Information Technology has to be up-to-date and relevant. This function includes, hardware, software and also automation projects. Security concerns have to be managed as all information in today’s times is in electronic format. Even money transfer is done electronically. Hacking of accounts, servers, etc also needs to be ensured and kept safe with highest level of encryptions.
2.9 Management Information System:
Better known as MIS, this is a key function as the top management gets all their vital information via this channel. The top management is empowered to make an informed decision. Al key decisions are based on the material information provided in this MIS pack. All key departments provide MIS to the top management.
Primarily, treasury functions revolve around the monitoring of cash, the use of cash, and the ability to raise more cash.