What are the best ways to ensure treasury management policies and procedures stay relevant?

1 Review your policies and procedures regularly

You should not wait for a crisis or a major change to update your treasury management policies and procedures. You should review them periodically, at least once a year, to assess their suitability, performance, and compliance. You should also monitor the external and internal factors that may affect your treasury management, such as interest rates, exchange rates, credit ratings, cash flow forecasts, business plans, and risk appetite. By reviewing your policies and procedures regularly, you can identify any gaps, weaknesses, or opportunities for improvement, and make timely adjustments.

2 Involve key stakeholders

Your treasury management policies and procedures should not be developed or revised in isolation. You should involve key stakeholders from different functions and levels of the organization, such as finance, accounting, operations, sales, IT, and senior management. By involving key stakeholders, you can ensure that your policies and procedures align with the overall objectives and priorities of the business, reflect the needs and expectations of the users, and incorporate the best practices and standards of the industry. You should also communicate your policies and procedures clearly and consistently to all the relevant parties, and provide adequate training and support.

4 Benchmark your performance

You should not only follow your treasury management policies and procedures, but also measure their outcomes and impacts. You should establish key performance indicators (KPIs) that reflect your treasury goals and targets, such as cash conversion cycle, liquidity ratio, return on investment, cost of capital, and hedging effectiveness. You should track and report your KPIs regularly, and compare them with your peers, competitors, and industry benchmarks. By benchmarking your performance, you can evaluate your strengths and weaknesses, identify areas for improvement, and demonstrate your value to the business.

5 Seek feedback and innovation

You should not be complacent or resistant to change when it comes to your treasury management policies and procedures. You should seek feedback and innovation from various sources, such as your treasury team, other departments, customers, suppliers, banks, consultants, and regulators. You should listen to their suggestions, opinions, and experiences, and incorporate them into your policies and procedures, as appropriate. You should also keep abreast of the latest trends, developments, and best practices in treasury management, and adopt them, as feasible. By seeking feedback and innovation, you can ensure that your policies and procedures are relevant, responsive, and competitive.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?