How does treasury add value to private businesses?
Treasury proactively manages financial market risks (FX, interest rate, commodity), protects profit margins, increases certainty over cash flow, maintains price competitiveness, reduces financial risks, and eliminates negative surprises from unexpected volatility.
A good Treasury department will help the business by clarifying the internal and external risks to the business. Understanding tolerance to risk, the competitive position (price taker or price maker), sensitivity to market volatility and where possible, will get to a position of increased confidence over cash flow forecasts. Often, increasing Treasury efficiencies can be the cheapest source of cash.
Why it matters: A smoother earnings curve increases shareholder value and gives greater confidence to business owners to reinvest and allocate capital.
While large organisations have the resources to hire Treasury personnel, Rochford is an outsourced Treasury solution to ANZ SMEs.
By New South Wales based Family Business Accredited Advisor
Joe Goodwin
Head of Business Development at Rochford Capital
