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The “raison d’être” of treasury finds a wonderful example with the current health crisis.

Treasury, a major discipline in finance

Who could argue that treasury is not one of the major disciplines of finance? When business is more strained, working capital requirements and needs higher, treasury is the necessary lifeline. This health crisis will have serious economic consequences. The companies more exposed, such as air transport, travel, hotels and restaurants, bars, entertainment, cinemas, theatres, trade fairs, etc.. will face "cash flow" and treasury problems soon. They're going to run out of cash. The more foresighted and the strongest companies will have enough credit lines to shrugging things off and to ensure this tough period of deficiency and scarcity. But the others will be in sometimes insurmountable difficulties. We realize the usefulness of things when the need arises. Treasury is going to be a term and a concept, believe me, that many companies will master better. Some will cry about a lack of rigor, foresight and organization. The treasurer is, in my humble opinion, the most important person in finance.

The Treasurer, the Forgotten

Too often CFO’s forget it. A strong crisis will remind those who doubt the value of proper liquidity management and foresight. It is a pity that crises and problems are needed to demonstrate the usefulness of cash management. A business can be profitable, generate returns and fall due to lack of liquidities. It is a triviality and yet some have forgotten it. Having cash and "committed" credit lines are absolute necessities. Of course, they must be properly dosed. But when an unexpected and violent crisis happens, like that famous Covid-19, we remember that being careful was/is virtuous. The Treasurer is the “insurer of liquidity” and the guarantee that outflows will indeed be carried out. Bankruptcy occurs when the company defaults, not when it records losses. When everything is fine, we forget to be careful and when the cold comes, we find ourselves discovered and without coat. The financial risk management specialist is the treasurer and no one else. Let's not forget that. The crisis will remind him very severely of the unwary who have not valued the treasury and who have neglected this essential pawn of the chessboard of finance. I am afraid that there will be deaths on the side of the road if the pandemic persists because many do not have enough security of their liquidities. And when the crisis is there, it's often too late to negotiate back-up lines of credit. As the French proverb says: "Excessive precaution does not do harm."

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