Treasury Management CPD: Essential Knowledge for Finance Professionals

What Is Treasury Management?

Treasury management encompasses cash management, liquidity planning, foreign exchange risk management, interest rate risk management, debt financing, and investment of surplus funds. For many finance professionals, treasury is a specialist area encountered in senior roles — FCs and FDs need a working understanding of treasury concepts even if they don't manage a treasury function directly.

Core Treasury Concepts for CPD

Cash Flow Forecasting

Treasury's primary responsibility is ensuring the organisation has sufficient cash to meet its obligations. Short-term cash flow forecasting (13-week rolling) tracks daily and weekly cash movements. Medium-term forecasting (12–24 months) informs borrowing decisions. Long-term forecasting connects to the business plan and financing strategy.

Foreign Exchange Risk

FX risk arises when cash flows are denominated in foreign currencies. Transaction exposure (known future cash flows in foreign currency), translation exposure (balance sheet items in foreign currencies), and economic exposure (long-term competitive impact of exchange rate movements). Hedging instruments include forward contracts (fix the rate now for a future transaction), options (right but not obligation to trade at a fixed rate), and natural hedging (matching foreign currency income with foreign currency costs).

Interest Rate Risk

Borrowing at floating rates (linked to SONIA in the UK post-LIBOR) creates interest rate risk — if rates rise, borrowing costs increase. Interest rate swaps (paying fixed, receiving floating) convert floating-rate borrowing to fixed rate. The LIBOR transition to SONIA completed in December 2021 and is relevant for any finance professional who works with loan agreements.

Debt Financing

Revolving Credit Facilities (RCF), term loans, bonds, and commercial paper are the main corporate debt instruments. Covenant compliance (interest cover, leverage ratios, net worth tests) is a key treasury responsibility. Refinancing risk (debt maturing without replacement facility) is a major business risk for leveraged companies.

Treasury as CPD

ACCA, CIMA, and ICAEW members can log treasury training as verifiable CPD. The Association of Corporate Treasurers (ACT) offers the CertICM (Certificate in International Cash Management) and AMCT (Associate Member of the ACT) for those specialising in treasury.

Further Reading

• CPD for Finance Professionals
• ACCA AFM Guide
• CIMA F3 Financial Strategy Guide