What are the objectives of treasury management?

Treasury management involves the management of an organization's holdings in liquid assets and liabilities, with the goal of optimizing liquidity, managing financial risks, and ensuring efficient cash flow. The key objectives of treasury management are as under: Availability of Right Quantity: It ensures that the funds have been arranged in the required quantity. This quantity is available to the firm either as external loans or as internal generation. The treasury manager must ensure that the company has access to sufficient funds to meet its operational and strategic needs. Availability in Right Time: The requisite funds for day-to-day working of the firm are available in time, in addition to being available in quantity. The 'right time' refers to the reasonable time taken to procure the funds, ensuring that liquidity is maintained to meet obligations as they fall due. Deployment of the Right Quantity: It ensures that the right quantity of funds is deployed effectively. For deploying the right amount of funds, the treasury manager keeps track of all receipts of funds and prepares a timetable for the deployment of funds to maximize returns while managing risk. Deployment at Right Time: A logical corollary of sourcing funds at the right time is that funds should be deployed at the right time. The treasury manager has to honor the outstanding commitments on working capital account within a short span of time, ensuring timely payments and investments. Profiting from Availability and Deployment: One of the prime objectives of a treasury manager is to ensure timely procurement and deployment of the right amount of funds. This objective results in administrative smoothening and paves the way to register achievement of performance targets of the firm. Modern-day treasury managers also aim to make a profit from sourcing and deployment activities, through active management of financial assets and liabilities.