How to be Successful as a Treasury Manager? A simplified guide
Welcome to the Corporate Treasury 101. This is the second article of our series of interviews with Mike Richards, the Treasury Recruitment Company’s CEO and the Treasury Career Corner podcast host. In the previous article, A Comprehensive Guide to a Career in Treasury, we explored the early stages of a career in treasury, from graduate jobs to the roles of treasury assistant and analyst. Now, we dive into the mid-levels of a treasury career, specifically focusing on the vital role of a Treasury Manager.
We will delve into the skills, challenges, and opportunities that define the mid-level stages of a treasury career. Whether you are an aspiring manager or seeking to enhance your managerial skills, this article will provide valuable insights and practical guidance. This article aims to shed light on the path to becoming a manager, the qualities that make a great manager, and the evolving nature of their role in the ever-changing business landscape.
By reading this article, you can expect to learn the following:
- The Path to Becoming a Treasury Manager
- Key qualities that define a great manager in the treasury field
- The expanding scope of the manager’s role, encompassing broader business comprehension
- Salary Considerations and the Pros and Cons of the Position
- And much more, as we unravel the nuances of treasury management and provide valuable insights for treasury professionals at all stages of their careers.
Let’s embark on this enlightening journey into the world of Treasury Managers, uncovering the skills, challenges, and opportunities that lie ahead.
What is the Role and Responsibilities of a Treasury Manager?
Stepping into the shoes of a treasury manager involves a shift in responsibilities and understanding how a corporate treasury is structured. So, what exactly is the role of a treasury manager? Let’s hear it from Mike Richards, CEO of the Treasury Recruitment Company.
Understanding the Structure of Corporate Treasury
The responsibilities typically involve day-to-day tasks when starting as an assistant analyst in a treasury. You might be involved in different facets of the business, such as the front, middle, or back office. Here’s a simplified breakdown of what these terms mean:
- Front Office: This is the dealing end of the business. For instance, if your company wants to buy another company, raise funds, or deal with foreign exchange risks, you would handle these transactions as a front-office dealer. You’d directly communicate with banks and other financial institutions, performing tasks like foreign exchange deals or debt transactions.
- Middle Office: The focus here is on risk management. Once a deal is done in the front office, it moves to the middle office, where the inherent risks are evaluated. These might include potential geopolitical conflicts, future uncertainties, and the like. The treasury accountant, who may reside in the middle office, accounts for the deal, putting the financial records into the system.
- Back Office: The back office is responsible for recording and accounting for all completed transactions. They are also responsible for the processes and procedures, ensuring they are efficient, fit for purpose, resilient, and compliant.
It’s important to note that these descriptions are generalizations, and the specifics can vary between different companies or industries.
The Role of a Treasury Manager
As a treasury manager, you could oversee all these areas. You might have an insight into the back office for compliance purposes, although this could be handled by a separate line to maintain independence. But typically, moving up to the manager level involves people management.
You might be overseeing the treasury assistant, analysts, or dealers. The number of people you manage could range from a handful to several dozen across multiple continents and treasury centers. As Mike points out, the challenge here is that many treasury professionals become “accidental managers” without adequate management training. This highlights the importance of investing in management training as you ascend the treasury career ladder.
Essentially, a treasury manager is a pivotal player in the treasury team. They ensure the smooth running of operations and guide their team in navigating the complexities of treasury management. They handle the tactical aspects of treasury while mentoring their team members, maintaining compliance, and mitigating risks, making them a crucial link between the strategic and operational facets of a company’s financial health.
The Interplay between Front, Middle, and Back Offices in Treasury Management
Treasury management has many moving parts, all crucial to a company’s financial health success. Let’s discuss how the front, middle, and back-office roles interact and contribute to the broader treasury operation.
A Closer Look at the Three Pillars of Treasury Management
Earlier, Mike touched on the three main pillars of treasury management: front, middle, and back office. Now, you might wonder about managing relationships with banks. Where does that fit in? Mike mentioned that both the front and middle offices handle this aspect. It’s a shared responsibility, depending on the nature and requirements of the relationship.
The Role of Treasury Management Systems
When implementing treasury management systems, the middle office usually steps in. Why? Because these systems are mainly about process efficiency and straight-through processing, which the middle office oversees. The front office team might be too busy to handle such a project. That’s when the middle office steps up to the plate.
The Conduit Between the Front, Middle, and Back Office
Sometimes, a role that links the front, middle, and back offices is needed. This role could be a treasury analyst, dealer, or systems consultant. This individual ensures seamless coordination between the different pillars of treasury management.
In summary, understanding the dynamics and interplay between the front, middle, and back offices in treasury management is crucial. It helps in building an efficient, well-oiled treasury department. It’s a bit like assembling a puzzle; each piece has its place and contributes to the overall picture. The front, middle, and back offices are those puzzle pieces, each essential for the department to function as a cohesive whole.
Understanding the Mobility and Different Profiles in Treasury Roles
The treasury department, composed of the front, middle, and back office, is like a well-oiled machine, with each part playing a critical role. Now we will explore the idea of professionals moving between these roles and the distinct profiles suitable for each office.
Mobility Between Roles: An Asset in Treasury Departments
Mike shares an intriguing insight: movement between front, middle, and back offices is possible and highly recommended. It turns out that the more areas of treasury you’ve been involved with, the more comprehensive your understanding of the whole operation.
Imagine you’re in the front office and have had some back-office experience. When planning your deals, you’d also have a clear picture of how the back office handles those deals. This understanding helps to foster effective coordination between offices and makes you a well-rounded professional.
Back Office: Not Just Controls and Risk
The back office is sometimes considered responsible for controls and risk. Mike argues that this perspective doesn’t do justice to its crucial role, especially in companies dealing heavily with commodities.
He highlights how the back office isn’t just about accounting or risk management. It’s part of the operation that ensures the deals orchestrated by the front office are executed responsibly. That way, they significantly impact the company’s broader treasury operations.
Career Progression through Role Diversification
Mike also talks about the unique career progression opportunities within a treasury department. You could start as an accountant, transition to a treasury accountant role in the middle office, and then enter accounting and controls or the front office.
Interestingly, this dynamic shift across roles creates treasury professionals with a deep and wide understanding of their organization. Mike notes that the most successful treasurers he’s seen have navigated their careers across all offices, creating a solid foundation for their success.
In conclusion, as a treasury professional, it’s worth exploring various roles within your department. Not only will this give you a broader perspective of the operations, but it also provides a strong platform for professional growth. After all, in treasury management, every role is crucial, and understanding all of them offers a stepping stone to a higher career plateau.
What are Some Examples of Career Progression in the Treasury Field?
In the world of treasury management, career progression is diverse and fluid. Here, we will examine Mike Richards’ insights about how professionals have navigated through different treasury roles, drawing from his conversations with individuals in his podcast, Treasury Career Corner.
Case Study-1: Chris McConaughey’s Career Progression
One of the interesting career trajectories highlighted by Mike is that of Chris McConaughey, who had a varied journey through the treasury field before ultimately becoming the CFO of National Grid in New York.
Chris started his career in the front office dealing with Foreign Exchange (FX) and money markets, which are important areas in the treasury department where decisions about currency transactions and short-term investments are made. Later, he became a Treasury Manager for Capital Markets, an important part of a company where long-term financial strategies are devised.
Chris was also involved in a Treasury Management System (TMS) implementation project, demonstrating his versatility. A TMS is a software application designed to automate treasury operations, and being part of its implementation indicates a strong understanding of how different parts of a treasury department work together.
His varied experiences, ranging from the front to the middle office and even involving technology implementation, made him a well-rounded professional. It’s no surprise that Chris eventually became the CFO of National Grid, thanks to his comprehensive experience across different treasury roles.
Case Study-2: Sarah Jane Hall’s Ascension in Treasury Roles
Mike also mentions Sarah Jane Hall, the Global Treasurer for GlaxoSmithKline, a testament to the power of sticking with one company and climbing up the ranks. Although specific details of her progression aren’t available, it’s clear that she’s been with GSK for over two decades, working her way up to become the Senior Vice President (SVP).
The Common Thread: Versatility and Experience
A critical lesson from these examples is the importance of being versatile and gaining diverse experiences within the treasury department. By immersing yourself in different roles and understanding the nuances of each one, you are better equipped to make strategic decisions that affect the entire department or the company as a whole.
In conclusion, treasury management isn’t a straight-line career. Instead, it’s a fascinating field that rewards curiosity, versatility, and the willingness to take on new challenges. The stories of Chris and Sarah Jane are excellent examples of how treasury professionals can navigate their way up the career ladder, inspiring many in the field.
How Does a Treasury Manager Enable the Company Strategy?
Treasury managers play a crucial role in enabling a company’s strategy. In this section, we’ll delve into the insights provided by Mike Richards on how a treasury manager can contribute to the broader company strategy and ensure the organization’s financial well-being.
Treasury Management: The Custodian of Cash
At the heart of it, a treasury manager is essentially a “custodian of cash.” This is a crucial perspective offered by Mike. It’s not only about saving or making money for the company but also about safeguarding and managing the company’s funds. Being a haven in times of risk is what a treasury manager should aim for. This vision aligns with the overall company strategy to ensure financial stability and profitability.
Measuring Success and Making a Difference
One of the interesting practices shared by Mike was the idea of keeping a “black book.” This refers to noting each week’s activities that contribute to the organization. Whether it’s a risk management decision, a system implementation, or even mentoring a team member, all these activities directly or indirectly contribute to the company’s overall strategy.
This weekly reflection isn’t just about personal achievement; it’s about constantly aligning oneself with the company’s strategic objectives. In doing so, the treasury manager ensures they always contribute to the company’s overall strategy and mission.
A Broader Perspective
Another key point is always to keep the big picture in mind. A treasury manager is not just working for a company but is there to ensure the financial security of the company. This responsibility requires a broader perspective on how the company operates and how treasury activities influence the overall operations.
To summarize, the role of a treasury manager extends beyond managing cash flows and financial risks. It’s about being a strategic partner to the business, ensuring financial stability, and continuously aligning activities with the company’s overall objectives. It’s a role that requires both financial acumen and strategic vision.
How Can a Treasury Manager Influence the Company Strategy?
Let’s dive deeper into the discussion about how a treasury manager can influence the company’s strategy. We’re building upon the insights provided by Mike Richards, who draws from his experiences and observations to answer this question.
The Vertical Influence: Both Up and Down
According to Mike, a treasury manager’s influence runs up and down in an organization. Treasury managers must manage those who report to them and establish a supportive relationship with their superiors. A treasury manager can influence strategy by effectively managing and mentoring subordinates and supporting their superiors’ goals and initiatives.
Learning from Below: The Value of Feedback
As a treasury manager, seeking feedback from those who report to you is beneficial. It’s a form of bottom-up communication that can give you valuable insights into how your actions and decisions are perceived and how they impact the team. This feedback can be instrumental in guiding your management approach, aligning team efforts with company strategy, and improving overall team performance.
Supporting From Above: Aligning with Your Boss
Likewise, it’s also important to understand and support your boss’s vision. You can contribute to the company strategy by aligning your actions with this vision and helping your boss achieve their objectives. If you’re not in sync with your superior’s mindset, it might signal that something needs to change. This alignment is necessary for success, ensuring a coordinated effort toward achieving the company’s strategic objectives.
Fostering a Healthy Work Environment
Lastly, Mike stresses the importance of a positive work environment. A good boss, work-life balance, a friendly team, and recognition for achievements are all key factors that contribute to job satisfaction. As a treasury manager, fostering such an environment can greatly influence the productivity and morale of your team, ultimately contributing to the company’s overall success.
As a treasury manager, you hold a significant position that can greatly influence the company’s strategy. By effectively managing your team, aligning with your superior’s vision, and fostering a positive work environment, you can contribute to your company’s overall success and strategic goals.
Is Prior Experience as an Analyst or Assistant Necessary to Become a Treasury Manager?
This section focuses on a key question regarding career progression in treasury: is it necessary to have been an analyst or assistant to serve as a treasury manager effectively? The discussion between Hussam and Mike Richards sheds light on this subject and offers insights into the various paths to the role of a treasury manager.
Multiple Routes to Treasury Management
Interestingly, according to Mike, having prior experience as an analyst or assistant isn’t necessary to become a successful treasury manager. He notes that individuals from accounting roles often slot into treasury management positions quite well.
However, what can be challenging for them is if they don’t have prior management experience. Treasury management isn’t just about mastering the technical aspects; it also involves guiding and mentoring a team. This necessitates management skills, which can be developed through training.
The Benefit of Prior Experience as an Analyst
While it isn’t a strict requirement, having done the job of a treasury analyst certainly has its benefits. Understanding the pressures and tasks of an analyst from first-hand experience can provide valuable insight and empathy when managing a team.
But it’s important to remember that treasury roles are continually evolving. What was relevant a few years ago might not be so now. This dynamism makes it crucial for treasury managers to stay updated with the latest trends and developments in the field.
Fresh Perspectives Can Be a Plus
On the other hand, individuals coming into treasury management without prior experience as an analyst or assistants can bring fresh ideas. They can question existing processes, identify inefficiencies, and suggest improvements. This fresh perspective can lead to innovative solutions and improve the treasury function’s overall performance.
The Importance of Management Skills
Mike emphasizes the importance of good management skills for treasury managers. Even individuals with an accounting or finance background can learn about treasury. However, acquiring effective management skills might be more challenging. This insight applies not just to treasury managers but managers across all domains.
In essence, while technical knowledge of treasury functions is important, the ability to manage and influence people is paramount. The latter includes dealing with remote teams across different cultures and nationalities. As Mike puts it, it is often more about your EQ (emotional intelligence) than your IQ.
In conclusion, there are various paths to becoming a successful treasury manager. Regardless of your route, the key lies in honing your management skills and continuously updating your treasury knowledge. This combination will equip you to successfully navigate the dynamic world of treasury and deliver excellent results.
What Are the Additional Skills of a Successful Treasury Manager?
This section sheds light on a crucial question regarding the ideal skill set of a successful treasury manager. Hussam wants to know what unique abilities the best treasury managers possess that set them apart. In response, Mike Richards points towards the future of work and the importance of managing remotely.
Mastering Virtual Management
In addition to the hard skills and management acumen we’ve already talked about, one of the vital skills that Mike highlights for a successful treasury manager is the ability to manage remotely. In the wake of the post-pandemic world, work patterns have significantly changed. Remote work has become the norm rather than the exception.
Working remotely presents a unique set of challenges and requires different skills than managing in person. A treasury manager must now coordinate with team members who may be spread across different geographical locations and time zones. This requires excellent communication skills, a good understanding of technology, and a high organizational ability.
Balancing Work and Team Interaction
Mike shares an example from a conference with North American Treasurers. In this situation, a treasurer found it challenging to balance completing tasks and spending time with their team after returning to the office. This scenario points out the need for treasury managers to carve out specific time for team interactions.
Interacting with your team members, understanding their concerns, and fostering a supportive work environment is crucial, especially in remote work settings. This management aspect has been instrumental in making some treasury teams more successful than others. The ability to maintain and foster team relationships, even virtually, is a significant skill that sets successful treasury managers apart.
The Power of Successful Team Interaction
By discovering more about their team members during virtual interactions, managers can help create a cohesive and high-performing team. These interactions can contribute significantly to a treasury manager’s success. The team’s success, in turn, contributes to the overall achievement of the treasury function.
In conclusion, as we move towards a world where remote work is more prevalent, a successful treasury manager’s skill set extends beyond technical knowledge and management skills. Successfully managing virtually, balancing work with team interactions, and fostering a supportive work environment are all critical skills that can set successful treasury managers apart.
What are the Main Challenges Treasury Managers Face?
In this section, Guillaume delves into the daily hurdles of Treasury Managers. Mike Richards shares his perspective, highlighting the vastness of the role, the pressure from all directions, stress management, the need to embrace change, and the evolving skill set required in the age of automation and big data. Let’s unpack these challenges to understand them better.
The Broad Spectrum of Responsibilities
A Treasury Manager’s role isn’t narrow; it’s quite the opposite. You have to juggle a plethora of tasks and expectations. As a Treasury Manager, you often ask, “Do I have enough resources – both people and money – to meet these expectations?”
Balancing the resources and fulfilling expectations can feel like a tightrope walk. This balancing act is even more challenging by pressures from different stakeholders, be it your team members, senior management, or external partners. It’s like being a piece of coal under pressure with the hope of turning into a diamond.
The Inevitable Pressure and Stress
The pressures you face as a Treasury Manager can sometimes be overwhelming, leading to high-stress levels. Dealing with this stress is a critical part of your role. Maintaining your composure amid this pressure is a key attribute you must cultivate.
Managing Internal and External Partners
You also have to interact with internal and external business partners in this role. It’s not uncommon for different departments to approach you with their needs, expecting you to fulfill them. Juggling these demands can feel like spinning plates, but it’s an integral part of the job.
Adapting to Change
Change is a constant, especially in the treasury field. Recently hired successful Treasury Managers have a common trait – they embrace change. If you find yourself stuck in the mindset of “we’ve always done it like that,” it might be time for a mindset shift. Like most fields, the treasury is evolving, and staying adaptable is key to staying relevant.
The Rising Skill Set in the Age of Automation
Today’s treasury field is much different from a few decades ago. Automation and big data are transforming the field rapidly. No, robots aren’t taking away jobs but raising the bar for the required skills. As a Treasury Manager, you need to keep pace with these changes. Understanding big data, communicating effectively with programmers and data scientists, and managing people is essential to your role.
Being a Treasury Manager isn’t a walk in the park. It involves managing a broad spectrum of responsibilities, handling pressure and stress, managing internal and external partners, embracing change, and upgrading your skills to keep up with technological advancements. Despite these challenges, successfully navigating them can make you an outstanding Treasury Manager.
How Do Treasury Managers Assess the Resources Needed to Deliver Expected Results?
The task of assessing the resources needed in a treasury management role is a challenging one. Mike Richards highlights this area, discussing the necessity of the right people, systems, and knowledge across multiple areas. He also raises the importance of underappreciated aspects such as talent management and the essential human element in the profession. Let’s take a deeper dive into these insights.
Balancing People and Systems
You’ll find the right balance of people and systems at the heart of successful treasury management. You might think about how many analysts are needed for a specific task or what systems should be in place to achieve a “best-in-class” treasury. However, a crucial factor is recognizing that behind every system, a person is operating it.
It’s not just about having the most advanced systems or many analysts. It’s about having the right people to manage these systems and carry out the necessary tasks effectively.
Understanding the Broader Scope of Treasury Management
If you were to walk into a conference on treasury management, you’d see a variety of topics being discussed, ranging from liquidity to capital management to technology. As a competent Treasury Manager, you should know all these areas. The ability to contribute to discussions on any of these subjects is a testament to your expertise and versatility.
The Underestimated Importance of Talent and People Management
Yet, among these many topics, there’s one that often gets overlooked: talent management. This is where the human aspect of treasury management comes into play. Despite technology’s growing influence in the field, the people behind the screens still make things happen.
This ‘people aspect’ is vastly underestimated. If you attend treasury conferences, you’ll probably find only one ‘people stream’ despite the vast number of attendees. The focus is often on technology, missing that, at the core, treasury management is all about people.
The Key to Being a Successful Treasury Manager
You might not be an expert in foreign exchange or IT savvy, but if you can manage a team of talented individuals effectively, you’re on your way to becoming a successful Treasury Manager. The people aspect, as Mike Richards emphasizes, “rises above” everything else. The best treasury managers excel in leading and inspiring their teams. They understand that behind every successful operation, a team of people works tirelessly to make it happen. They value their team and recognize that their success is intrinsically tied to the success of their people.
So, as you assess what resources you need as a Treasury Manager, don’t forget to factor in the importance of people. Your team is your most valuable resource. Nurture them, guide them, and together, you’ll overcome the challenges and deliver exceptional results.
Exploring Salary Ranges for Treasury Managers
One of the key topics that often comes up in treasury circles is salary. What’s the expected range for a Treasury Manager? How does it change across the globe? These are questions that, quite understandably, are on the minds of many treasury professionals.
Mike’s first point of clarity is around job titles. As it turns out, Treasury Manager’ isn’t a uniform term. The roles and responsibilities of a Treasury Manager can vary greatly, depending on the region and the company’s size. Sometimes, the title might be ‘Treasury Director’ or ‘Group Treasurer’ or even ‘Head of Treasury.’ Mike suggests using a tool like treasurysalary.com to understand what job titles equate to what roles.
Salary Ranges and Regional Variations
Regarding salary, the range can vary based on different regions and factors such as experience, company size, and scope of responsibility. Here are some insights shared by Mike Richards:
United States (Texas)
- Treasury managers in Texas can expect a salary range of approximately $140,000 to $160,000.
- It’s worth noting that factors like inflation and market conditions can influence salaries.
United Kingdom
- In the UK, the salary range for a typical treasury manager is around £65,000 to £100,000.
- However, salaries can vary depending on factors such as the number of staff managed and the level of responsibility within the organization.
- Mike highlights a recent placement of a senior treasury manager with a salary of £115,000, indicating the potential for higher salaries at the senior level.
Europe
- In Europe, salary ranges for treasury managers can be higher than those in the UK.
- Some treasury managers in Europe may even hold the title of “head of treasury,” reflecting a higher responsibility level.
- It’s important to note that the title of “head of treasury” should correspond to the actual responsibilities of the role.
Conclusion:
In conclusion, the role of a Treasury Manager requires a unique blend of technical expertise and people skills. Effective Treasury Managers excel in managing teams, navigating complex financial landscapes, and adapting to change.
Closing the episode, Mike reminds us that being a Treasury Manager is rewarding. With the challenges presented by the shift from working virtually back to the office, Treasury Managers are essential in navigating the new financial landscape. They’re at the heart of the treasury operations, significantly impacting their organizations.
Despite the pressures and challenges, the role of a Treasury Manager is incredibly rewarding, offering a breadth of experience and the opportunity to shape a company’s financial future. Mike’s parting words encourage everyone to enjoy their roles in treasury, no matter the job title or the challenges they face.
Remember, the success of a Treasury Manager goes beyond the numbers. It’s about the people they work with, the challenges they navigate, and ultimately, the significant difference they make in their companies. As Treasury Managers, it’s all about embracing and growing through these challenges.
