How To Become A Head of Treasury

How To Become A Head of Treasury

Treasurers are the complete financial leaders, hyper-aware of everything cash-flow related in any enterprise of any size. They must be driven, diligent, detail-obsessed, highly competent and industry-savvy.

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In today’s fast-paced and dynamic financial landscape, the role of a Head of Treasury has gained significant importance. As an executive responsible for managing an organisation’s financial assets and liquidity, the Head of Treasury plays a critical role in ensuring the financial stability and success of the company. This article provides a comprehensive guide on becoming a Head of Treasury, outlining the necessary skills, qualifications, and steps to excel in this rewarding career.

Understanding the Role of Head of Treasury

The role of a Head of Treasury is a crucial and multifaceted position within an organisation’s financial operations. This role involves overseeing and managing the company’s financial assets, optimizing liquidity, mitigating risks, investment management, financial management, capital management, and maintaining strong relationships with financial institutions and banking partners. Successful treasury managers or corporate treasurers will be versatile with the following:

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  • Financial Asset Management: As a Head of Treasury, your primary responsibility is to manage the company’s financial assets effectively. This includes overseeing cash flow management, determining investment strategies, and optimising working capital to ensure sufficient liquidity for daily operations and future growth.
  • Risk Management: Mitigating financial risks is integral to the Head of Treasury’s role. This involves identifying, assessing, and managing interest rates, foreign exchange, credit, and liquidity risks. By implementing risk management strategies, such as hedging and diversification, the Head of Treasury safeguards the company against potential losses.
  • Relationship Management: Building and nurturing solid relationships with financial institutions, including banks, investment firms, and credit rating agencies, is essential. The Head of Treasury establishes and maintains these relationships to negotiate favourable terms for borrowing, investments, and banking services. Effective relationship management ensures access to necessary financial resources and support.
  • Cash Flow Optimisation: The Head of Treasury optimises the company’s cash flow. This involves forecasting cash needs, managing cash inflows and outflows, and making strategic decisions to enhance cash positions and debt management. Maintaining a healthy cash stream, the Head of Treasury helps the organisation meet its financial obligations and pursue growth opportunities.
  • Strategic Planning: The Head of Treasury contributes to the organisation’s strategic planning process. By providing financial insights, forecasts, and risk assessments, they assist in developing robust financial strategies aligned with the company’s goals.
  • Compliance and Regulations: Staying abreast of financial regulations, tax laws, and compliance requirements is crucial for a Head of Treasury. They ensure the organisation operates within the legal framework and adheres to financial reporting standards.

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They must also be capable of cross-departmental collaboration, including non-financial teams, leadership figures and external stakeholders.

Treasurers are part strategists, part accountants, and part financial leaders – they must be experienced in accounting, debt structuring, financial planning, credit control, investments, and stock management while also being mature enough to lead teams, drive efficiencies, and spot trends in cash management and global movements. Like every financial sector job, there are certain things you can do better to prepare you for a career as a Treasurer.

Please visit our job description page to find out more about the day-to-day responsibilities of a Treasurer.

Step 1 – Education

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To aim for a Treasury Manager job, which eventually will open the door to a Head of Treasury, obtaining appropriate education is essential to develop the necessary knowledge and skills.

Ideally, the candidate would have a bachelor’s degree in a finance-related discipline, which would provide the necessary background to become a treasury manager initially; CFO and FD role tends to be a bit wider than just finance and involve a degree of commercial acumen; Treasury is essentially cash management, and therefore a degree in finance would undoubtedly enable a candidate to hit the ground running faster.

Step 2 – Qualifications

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A Head of Treasury typically possesses a combination of qualifications, skills and experience in finance, treasury management, and leadership. While the specific qualifications can vary depending on the organisation and industry, here are the typical qualifications associated with a Head of Treasury role:

  • Certified Treasury Professional (CTP): This widely recognised certification demonstrates expertise in treasury management, cash management, risk management, and corporate finance.
  • Chartered Financial Analyst (CFA): Although not specific to the treasury, the CFA designation indicates advanced knowledge in investment analysis, financial markets, and portfolio management.
  • Certified Public Accountant (CPA): While not solely focused on treasury, a CPA certification can be valuable for understanding financial accounting, reporting, and compliance.

One has to note that whilst a bachelor’s degree will provide a “foot in the door”, progressions towards a Treasury Manager job and eventually to Head of Treasury require candidates to obtain professional qualifications.

Step 3 – Practical Experience

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To be an effective Head of Treasury, practical experience in Treasury Management is essential.

A Head of Treasury should have hands-on experience managing day-to-day treasury operations (most likely as a Treasury Manager).

Cash management, such as optimising working capital investing cash and investment opportunities to maximise cash returns, is also a prerequisite for practical experience.

The role’s experience in identifying, assessing and mitigating financial risks is also vital.

Debt Financing: Practical experience in negotiating and structuring debt facilities, managing relationships with lenders, assessing borrowing costs, and monitoring debt covenants is also valuable.

Treasurers must have their ears to the ground and work as trend-oriented professionals. Like CFOs and investors, the financial market’s whims will impact your work, so a keen eye for money management changes is vital to remain competitive.

Tertiary Education

Some organisations, especially publicly listed companies, where a Head of Treasury has much visibility, require candidates to have tertiary education, such as a Master’s Degree in Finance or a Master’s in Business Administration.

Current Treasury Managers should consider this step, giving them a competitive advantage over other candidates.

It is worth mentioning that it is not a “must-have”; however, with increased competition across finance roles, tertiary education would undoubtedly give a head start.

Skills Required for Treasury Management

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As in any senior role, a Head of Treasury will need a combination of interpersonal, management, and “hard” finance skills, including:

  • Leadership Skills. The candidate must have excellent leadership qualities to effectively manage teams in the treasury department, drive strategic initiatives and thrive in a business partner environment.
  • Communication Skills. Strong communication skills are required to build relationships with key stakeholders, including banks and other external parties, and explain financial figures clearly and concisely.
  • Financial Acumen. Ability to analyse financial reports, contracts, and transactions, perform financial modelling, and assess short-term investment portfolios.
  • Regulatory Compliance Knowledge. Candidates must be versatile, familiar with regulatory body requirements, and aware of financial regulations, tax laws, accounting rules, and compliance requirements relevant to treasury operations.
  • Strategic Thinking and Decision-Making. Strong analytical and problem-solving skills to evaluate complex financial scenarios, assess risks, and make informed decisions aligned with the organisation’s goals.
  • Risk Management. Ability to identify, assess and mitigate financial risks such as interest rate, foreign exchange, credit and liquidity risks.
  • Negotiation and Relationship Management. Strong negotiation skills are valuable for interacting with financial counterparties, negotiating debt facilities, managing banking relationships and securing favourable terms.
  • Problem-Solving. It is necessary to address complex financial challenges and find innovative solutions.

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Career Progression

To become a Head of Treasury, candidates must develop their career throughout the Treasury Department.

They would likely start as a Treasury Analyst, possibly in a financial institution or a bank, giving them invaluable insights should they choose to move to “the other side” or the private sector.

After obtaining their certifications, which their employer usually sponsors, they would aim for a Treasury Manager position and have broader exposure to cash and investments.

Whilst the sector is not essential, as significant publicly listed companies Treasury Department would be no different from a bank; individuals operating in businesses that offer financial services or even banks and investment banks tend to have a distinctive advantage.

This should encourage potential candidates to apply for Treasury roles in private companies; the practical experience tips highlighted above would ultimately enable individuals to progress to Head of Treasury roles.

Average Salary

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As in any position, the average salary depends on the scope of the role and the type of organisation involved.

In the UK, the average salary for a Head of Treasury is around GBP 150,000; in major financial centres such as Germany and Switzerland, the compensation can be up to EUR 200,000.

It’s important to note that the salary ranges provided are general estimates and can vary significantly based on individual factors and market conditions.

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