Treasury administration

In this work we try to highlight the treasury function or the treasure as an indispensable element within an organization despite being often ignored or left in the background as it does not clearly define its responsibility within the financial area, capable of being reflected among its many functions in the good survival of money and record of it. To maintain a working capital that avoids complications in the business production cycle that can cause severe inconveniences not only in the short term, but in future operations that would make the operation and survival of the organization as unviable.

• Introduction to the financial function of money in the company

A good treasury is never the result of the improvisation of the moment is based on:

1. That the company obtain benefits That the financial and general management of the company. It has been raised in all seriousness.

The treasury finances the entire production cycle in every company in motion, there is a continuous circulation of capital, which runs from the metallic money itself that is kept in cash and banks, material goods (inventories equipment and buildings), and semi-liquid financial assets (accounts receivable), which ultimately ends up being cash.

This monetary flow generated by the activities of the business can be increased by outside sources through loans, capital increases.

Own money Contribution money Potential resource

Operation + Money for Credits + capital = From the Company

As a counterpart we have disbursements to creditors and suppliers, as a consequence of the operation of the business plus interest and dividends.

Most important problems in the treasury

1. Insolvency: Failure to have sufficient availability in the appropriate time and place to meet the obligations and financing of the company, failure to meet this objective can have serious consequences, such as discredit, the need to resort to unfavorable systems of financing. Being able to finally go bankrupt due to lack of liquidity. Lack of capital: Failure to maintain a cash balance that allows the company to sustain business decisions in the short, medium and long term, referring to the financing of operating working capital, the expansion of their markets (launch of a new product to the technological update which is highly accelerated or other investments in plant or equipment.

Causes of treasury difficulties

Defects in financial management itself, including:

• Poor structuring of the company's liabilities, without taking into account or not foreseeing, the changes in the global economic situation. Use of short-term loans to finance slow recovery investments. Capital insufficiency that prevents correct financial management. Permanently high net indebtedness reason why the company always operates using its credit to the maximum. Lack of financial policies and procedures (credits, collections, others) Accumulation of the balances receivable from clients some with doubtful recovery, forgetting that the productive cycle ends with the collection of the quantities sold.

Non-financial management defects

• The accumulation of stocks of raw materials or finished products, either due to a management defect, having bought above the needs or trying to speculate in the face of an increase in prices. Extension of the delivery times of the merchandise, which causes a increase in operating costs to be financed. Any measure, in general, tends to increase assets and therefore obligations payable arising from the production, sales, systems or other departments without previously having a financial plan to back them up. Alteration of sale prices or collection or payment conditions, without the knowledge of the financial manager in whose area the consequences of these decisions will ultimately fall.Agree payment terms less than the collection terms, without having consulted with the financial area,their viability or simply because they do not have supplier payment policies that specify them.

General approach defects of the company

• The behavior of the shareholders of the company that usually consider this as a source of income, without a counterpart contribution or doing so in insufficient amounts apart from refusing to contribute their capital as opposed to others doing so in order not to lose influence and greed for dividends, hindering self-financing Lack of a coherent policy and commitment between the different areas (production, sales, finance) in which each one tries to solve their problems in a particular way. It is common for financial problems or major projects to be solved at the management level k Board of Directors, without consulting the financial manager, it often happens that they decide to make an investment, without having made the financial economic evaluation.

1. Introduction to the titles and values ​​(includes the last valid devices - law 27287)

The bill of exchange

Definition: It is a commercial document, by means of which, a person turns in charge of another an amount s his own order or that of a third party, even future maturity.

The bill of exchange must contain:

• The name and the number of the official identity document of the person in charge of the tour The name of the person to whom the payment should be made The name the number of the official identity document and the signature of the person who turns the bill of exchange

Presentation for acceptance

• The drawer may stipulate in the bill of exchange that it be presented for acceptance, setting a deadline or without this mobility. If no deadline has been set for submission to acceptance, it will be mandatory if submission for this purpose, before its expiration.

Of the protest for lack of acceptance

• The protest for lack of acceptance proceeds when the bill of exchange for acceptance has been presented unsuccessfully, within the deadlines set for it. The protest for lack of full acceptance waives the presentation for payment or the protest for non-payment, assuming the drawer the quality of principal liable against whom and other liable parties proceed to exercise the exchange action derived from the bill of exchange for the sole merit of the protest for lack of acceptance.

Bill of exchange with special clauses

This is a new form of letter and considers the following special clauses:

1. In case of default, this bill of exchange will generate the compensatory and moratorium interest rates plus cans that the law allows its last holder. The maturity period may be extended by its holder, for the period indicated by it, without it being necessary The intervention of the principal or the joint and several ones. Its amount must be paid only in the same currency that expresses this title value. This bill of exchange does not need to be protested for non-payment.

The pay

Definition: It is a security of circulation is a credit document as well as the bill of exchange, with the pure and simple promise to pay a sum of money, in a certain time.

Unlike the bill of exchange, which is an abstract document, the promissory note is a document of casual origin, that is to say that in said document the compensatory and late payment interests may be agreed, the cause that originates the promissory note may be included, as may also include the guarantee or guarantee with which the obligation is secured.

It is for this reason that the promissory note is more used than the bill of exchange in banks and financial institutions because it is for its purposes a more complete security.

Promissory note requirements:

It must contain:

1. The denomination of the promissory note or voucher to the order The indication of the date and place of issue The pure and simple promise to pay a certain amount of money The name of the person to whom or to the order of whom the payment should be made The indication of maturity and The place where the payment is to be made The name and signature of the debtor.

• A promissory note can be renewed and the maturity term extended in the event of changing the rate or the amount of the promissory note, a new one must be issued. In the promissory note as in the bill of exchange, the guarantee can intervene and also its responsibility is joint and several.

I will pay with specific clauses

This is a new form of promissory note and considers the following special clauses:

1. This promissory note must be paid only in the same currency that this security value expresses.On its maturity, it may be extended by its holder, for the period indicated in this document without requiring any intervention from the principal or the parties liable. Since its last maturity, its total amount and / or installments will generate the most moratorium compensatory interest at the maximum rates authorized or allowed by its last holder. of having expired its term and not having been extended, except for the protested of the unpaid quota if it opts for the preclusion of terms. The amount of this promissory note and / or its quota, according to the amounts and dates indicated in the document attached annex, according to law.The amount of this and / or its fees,will generate from the date of issuance of this promissory note until the date of its respective maturity a compensatory interest at the rate of% per year. The corresponding payments may be verified with a charge to the indicated account of the bank.

The check

Definition: It is a private instrument that constitutes a payment order on a bank in which the drawer maintains a balance in his current account, in a payment mandate that serves the drawer to pay a third party or himself, with the Available funds you have in your checking account.

Check content

• The name and address of the bank in whose charge the check is issued The name and signature of the issuer, who is the principal.

Post dated check

With the exception of the deferred payment check, the post dated date or the clause that establishes a term for the negotiation or payment of the check is considered not set, the check is payable on demand the day of its presentation even if it has a postdated date.

Closing of current accounts by check draft without funds

• When, in a period of six months, the issuing bank records the non-payment due to lack of funds, total or partial, in two checks.When in a period of one year the drafted bank rejects the payment of one or ten times more checks for lack of total or partial funds, whether or not this is recorded in the same title, the rejection of the same check will be computed at the rate of one per day.

From check to credit account

The issuer as well as the holder of a check may prohibit their payment in cash and by cash box inserted in the title the clause "for payment on account" or another equivalent the delay of this clause cancels exchange effects.

Of the guaranteed check

The bank may authorize checks with provision of guaranteed funds in special formats and security paper, in which it is expressly stated:

• The denomination of "guaranteed check" Maximum amount by which the guaranteed check can be issued, or amount printed in the same title. Names of the beneficiary, not able to be drawn to the bearer Other than the drawn bank agrees.

Deferred payment check

The deferred payment check is a payment order, issued by a bank, under conditions for payment of the expiration of the term indicated in the same title. The one that cannot be more than 30 days from its issue

Banks may provide their clients with different or special stubs for the issuance of deferred payment checks, and these checks and / or common checks may be issued against the same current account.

The conformed invoice

Definition: it is a security value accepted by the client, accepting the supplier's credit conditions.

• The conformed invoice originates in the sale of merchandise, as well as in other contractual modalities of transfer of ownership of goods that may be affected as a pledge. In which the deferred payment of the price is agreed. The object of the purchase sale or other contractual relationships referred to above must be merchandise or merchandise, other than money not subject to registration. The goods and merchandise may be unidentifiable or No, the conformity established by the buyer or acquirer in the title text demonstrates by itself and without admitting proof in the contract that he received the merchandise or goods described in the invoice conformed to his total satisfaction Only once he has the conformity, the title may be subject to transmission.represents in addition to the credit consisting of the balance of the price indicated in the same title. The real pledge right that remains constituted on all the merchandise and goods described in the same document in favor of the holder.

The conformed invoice must contain, among others, the following

• The description of the merchandise delivered, indicating its class, series, quality, quantity, states and other references that allow determining its nature, gender, and patrimonial value that is affected in guarantee in favor of the holder of the title. The signature of the buyer or acquirer who from then on it will have the quality of principal and custodian of the goods.

Maturities

The expiration of the conformed invoice can only be indicated in the following ways.

• At a fixed date or dates of expiration, depending on whether it is a single payment, or in armies or quotas..

In case the payment of the invoice made up in armies or quotas has been agreed, the non-payment of one or more of them empowers the holder to give up all the terms and to demand the payment of the total amount of the title or alternatively to demand the outstanding benefits. on the expiration dates of any of the following installments or inclusive, on the date of the last assembly or installment as freely decided by said holder.

1. Treasurer's functions

Review and control of bank reconciliations

The treasurer as the first function of the day, must review the bank reconciliation prepared by the cashier and in this way he becomes aware of the movements made the previous day, as well as the opening balances of the day (Bank accounting, available and books)

It also controls and verifies if the different committed operations have been carried out, such as

• The purchase and sale of dollars, checking that the agreed exchange rate has been respected. If the bank proceeded to pay the discount letters or the factoring operation presented, verifying the interest applied. If certain clients complied with making the deposits offered for the payment of your debts. If the bank paid us the advance in account or promissory note offered. If the transfer was made via bcr from one bank to another in order to cover a potential overdraft. If the transfer was made by a supplier from abroad and if the conversion the destination currency was correct. It also finds out if there were rejected checks or protested letters, etc. As we see, there are various operations that have to be verified, and above all or more important to take action on those that are committed and not carried out.

1. Check writing authorization based on available balances and daily, weekly, monthly and annual cash flow.

The treasurer who keeps a copy of the bank reconciliation and who is responsible for the daily issuance and updating of the cash flow must, based on this information, authorize the payment proposal, and may request its modification (reduction or increase), according to I evaluated it convenient.

1. Control and monitoring of unidentified charges and credits, registered in bank current accounts

As we will mention in point 3. referring to the functions of the cashier, he must also verify and register the payments for crimes reported in our bank current accounts. The treasurer must verify / coordinate with the cashier that the charges or payments are being made according to the agreed conditions regarding dates, interest rates and amounts.

But it is very likely that all of them cannot be identified, which is why, as we will already mention in point 2. Regarding this, a detail of the credits and charges not located will be taken as part of the bank reconciliation, being the treasurer's responsibility to go managing your prompt identification, by:

• Coordination with the sales and collections area, recommending that these be in writing. Coordination with the banks, in which the unidentified operations are registered, sending them a letter with the details thereof. Direct communications with clients and suppliers, when we have any specific evidence.

1. Issue of daily, weekly, monthly and annual cash flow management report, example case

This is a very important responsibility of the treasurer must maintain a cash flow, making a strict control of each of the items of income and expenses, this must be referred to:

Confirm day by day if the income is being made according to what is programmed as income we have:

• Collections, whose possibility of execution depends on the previous management that we carry out, but with certain limitations because it is not our decision.

To see day by day, if the programmed expenses can be executable for being a management of the own company, we should have taken into consideration the following:

• We have had to carry out a thorough and conscientious projection of all the expenses of the company. We must be strict in complying with the programmed expenses. We must not include income items not considered. Unless it is unexpected and urgent. It is important to keep in mind that if the scheduled income is not met, we could not meet the scheduled expenses either.

Management report: Cash flow

What is it?

• Record cash income and expenses Reflect movements of: Operations Financing Investment Has a real accumulated and a projection It is a management tool for decision and action It measures a company's payment capacity Alerts financing needs Establishes standards for subsequent control

How to do it?

• Define currency nuevos soles, dollars (inflation, devaluation) Forecast sales and collections conscientiously, as a consequence of market strategy. Establish resources and payments necessary to achieve forecasts that result in compliance with production strategies. Establish all operating expenses that have the company, such as salaries, social security contributions, taxes, general suppliers of materials, equipment renovations, etc. that allow the operation of the business. Record all the arranged indebtedness and reflect in the flow the payment of the debt service (principal plus interest). Establish the indebtedness to be arranged, for the operational and investment needs, adapting the flow of payments to the business cycles Simulate possible scenarios: optimistic,Realistic and pessimistic Cash flow must be consistent with other projected financial statements.Important: those responsible for each area must prepare the information to be recorded in the cash flow, the responsibility of the financial area that prepares the cash flow, is that of question the information to be entered.

Guide for preparing a cash flow

Income

Portfolio projection

1. Accounts receivable projection

Responsible: Head of revenues and collections

Concepts

• Invoices receivableCredit creditLetters receivableIn portfolioIn collectionsDeferred checks receivable

1. Other income to receive committed

Responsible: Treasurer

Concepts:

• Income from claims to banks for improper charges Reimbursements for insurance claims

1. Income from surplus placements

Responsible: Treasurer or financial manager

• Financial income from installment accounts, overnight or other Income from sale of stocks, bonds

Non Portfolio Projection

1. Sales revenue

Responsible: Sales Management

Concepts

• Specifications of the amounts to be invoiced or units to be sold of the different items in the latter indicating prices. Proportion of cash and credit sale specifying terms for each of them. Separation between Lima and provinces

1. Bank financing to be received

Responsible: Treasurer

Concepts

• Account advancesLettering discountFactoringShort, medium and long-term paymentsLeasings

1. Other income

Responsible: Financial Manager / Treasurer.

Concepts

• Capital contributions Sale of fixed assets

Expenses

Portfolio projection

1. Accounts payable projection

Responsible: Treasurer

Concepts

Bills payable

• Full credit

Bills payable

• In portfolio In collections In discounts Deferred checks receivable
  1. Payments to banks for debt owed

Responsible: Treasurer

Concepts:

• Cancellation of installments of loans received interest plus capital
  1. Overdue Sunat tax payments

Responsible: Accountant

Concepts

• IGV Income payments Other tax obligations
  1. Dividend payments to shareholders, royaltoies or obligations contracted in the stock market

Responsible: Treasurer

Concepts

• Dividend payments, royalties, bonds

Non Portfolio Projection

1. Purchases

Responsible: Logistics Manager, will project based on sales plan

Concepts

• Specification of the amounts or units to be purchased locally as well as imported, indicating estimated costs to consider for the merchandise Raw materials Intermediate products Finished products
  1. Financing expenses and bank expenses to contract, according to cash flow.

Responsible: Treasurer

Concepts:

• Account advancesLetter discountsFactoringShort, medium and long-term paymentsLeasingsFinancial expenses for various operations (opening of letters of guarantees, letters of credit, interest, account maintenance, others)
  1. Personal expenses

Responsible: Personnel or administration

Concepts

• Payroll Payroll Increases Sales force commissions, according to sales plan Holiday pay Pay bonus Reimbursement pay for service time Contribution and tax payments
  1. Investments in plant or fixed assets

Responsible: Finance management, approved by the board, an analysis of return on investment will be required.

Concepts

• Acquisition of real estate or plant or computer equipment Acquisition of software
  1. Operating costs

Responsible: Head of Administration / Treasurer

Concepts

• Electricity, water, electricity and telephone services Scheduled and unforeseen repairs Equipment maintenance Economy (office supplies) Security Insurance, according to agreed schedule Transport
  1. Tax for paying

Responsible: Accountant

Concepts

• IGV Income payments Other tax obligations
  1. Advertising and Promotions

Responsible: Marketing Manager

Concepts

• Advertising planAdvertising agency feesPromotional gift purchases

How to analyze it?

• Does the company generate an operating deficit overcoming? The level of income is feasible to reach? The level of expenses is consistent with that of income? If there is an operating deficit, it will widen? Projected financing may be paid for current and future operations that depend on the investment? The assumptions of the projections resist rigor? What are the most important items?

How to use?

• Annually, monthly, weekly, daily we have to know what our need is Know if the company is operationally viable Define when, how much, type of financing is necessary Focus the problem on accounts receivable, accounts payable, financing and cost, taxes, investments, others? Very important: to control foreseen vs real As a tool of commitment, communication, control, and reward, also of sanction. It is a management report that allows us, ex ante, to make decisions to improve income, reduce expenses, calls us to be creative and look for alternatives. from solution.

1. Control and monitoring of compliance with projected collections, credit and collection committees.

• Although the responsibility for the execution of collections and the fulfillment thereof is the chief of credits and collections, the treasurer must carry out a control and follow-up of the projected collections carried out since compliance with scheduled payments depends on their execution. It is important that we establish a credit and collections, commercial and treasury committee or others that we consider appropriate, in order to coordinate actions or deal with other related matters, issues that finally have direct implications in the management of the treasury. Each credit and collection committee must be transcribed in a summary document (minutes), which will be reviewed as the first point at the meeting the following week.

1. Management of credit facilities in terms and rates, before entities, financial (payables, advances in account, financing of imports, exports, letters of credit, letters of guarantees, leases etc.)

This is also a very important function of the treasurer, who is responsible for evaluating the financial needs of his company and it is through the cash flow that the treasurer can anticipate his decision to request bank financing, which can be done through.

1. Direct credit: Which are physical disbursements of money, which can be:

• In the very short term, that is, less than 30 days (advanced account, factoring, discount of letters) In the short term, minimum 30 days up to one year (promissory notes, factoring, letter discounts, import financing, etc.) In the medium term, more than one year up to five years (leasing, medium-term loans for different purposes) In the long term, from five to more years (property acquisitions or large equipment)
  1. Indirect credits: Which are not physical disbursements of money, but refers to different operations in which banks guarantee their clients against a possible default these indirect operations, are given through the opening of letters of credit, for the attention of imports or bank guarantee letters that can be used, for example, to request a credit or participate in a public tender.

1. Operations or direct credits

Operations under technical forms, by which banks use the capital received from clients, correspondents or their reserves to financially support their clients through credits or direct money loans are also called cash risk operations.

Main direct operations

1. The current account credit:

• Overdraft Advance Account

1. Lettering discount

Operation by which a bank, after deduction of interest, anticipates a client the current value of a credit title granted to a third party, not yet expired, through the transfer of said title.

The bill of exchange is the title of credit that is most often loaned to be admitted at the discount followed by the notes and warrants

1. Factoring

In a contract between the bank and its client by which the bank (factor) acquires the deficiencies that its client has, for the invoices made to its debtor clients, paying in compensation the total amount of the documents presented, deducting the interest.

1. IOU discounts

Follow the same procedures as the letter discount. The interest that banks charge for these cases can be advanced or expired.

1. Warrants discounts

It is a certificate of deposit issued by a warehouse authorized by the superintendency of banking and insurance, stating that a good has been physically deposited in warehouses.

Indirect Operations Or Credits

They are those operations in which the bank appears as guarantor of the obligations of its client, these operations generate commissions in favor of the bank, the guarantee is generally backed by some type of counterparty that allows the bank to recover in case it is forced to honor the obligation due to non-payment by your client to whom you granted the credit.

Main indirect operations

Bail letters

They are documents issued by the bank, guaranteed to its client before a third party for certain transactions.

Letter of credit

It is a contract using international merchandise sales and purchase, by which the foreign buyer requests his bank. The opening of a credit in favor of its vendor vendor, payable against the delivery of certain shipping documents, safe transport, quality, etc. in order to avoid disputes between the seller and the buyer regarding the interpretation of the credit terms, the International Chamber of Commerce has instituted the use of standards called Incoterms.

Forms of Letters of Credit

Revocable letter of credit.- It can be revoked or canceled by the payer at any time and without further processing, even if it has been previously canceled by the paying bank, its use is not recommended.

Irrevocable letter of credit: It is a secure means of payment, since it cannot be revoked or canceled by the payer, without first having obtained the consent of all the parties involved, these can be:

• Not confirmed: only has a payment commitment from the issuing bank Confirmed has a payment commitment from the issuing bank and the notifier, its payment method can be: At sight: Payment to the exporter when it presents the documents according to the terms and conditions stipulated in the credit Acceptance: Payment at maturity of the bills drawn according to the term established in the text of the documentary credit, the seller (exporter) can discount the bills.

1. Assessment of Bank Costs

• There are different offers of banking services that are offered to the company, being the treasurer's responsibility, evaluating them and opting for the most convenient in terms of their applicability, always evaluating the cost-benefit ratio. The eligibility of certain services, as we discussed, depends on the The needs of the company may be the case of a company located in Lima that distributes nationwide. Obviously, it will need the services of a bank that maintains offices throughout the national territory, but it could be the case that this same bank does not have attractive passive rates, where to place their surpluses it will be necessary then for this last need to make quotations in different banks and decide for the one that pays us the most for our money in this hypothetical example, we could work with two banks.In practice, it is advisable to work with few banks (an average of 4), which provide us with the services we need, that is, we must carry out a strict evaluation in order to maximize the banking services offered by the selected banks, ruling out those that only mean expenses for account maintenance.

Attention to Suppliers (Queries, Refinancing, Others)

Another of the functions of the treasurer, is to attend to those to attend to the suppliers to answer the pertinent queries, it could be the case that it is our interest, to propose to the suppliers, certain facilities for the payment of our debts or in everything case treat a refining of a debt.

In general it is recommended

• Show them a lot of interest in their explanations, be open to all inquiries, responding to those who are competent as a financial part and referring to the respective area before determining the subject. When we propose a refining of the debt, we must explain the reasons for this decision, also stating that it is from a temporary average we must be transparent about a certain subject.

Tracking of the maturities of all the documents valued

• As we will note in point 14), referring to the functions of the cashier, this is in charge of preparing the control reports of the different documents valued as custodians at the cash desk, as well as outside it (banks, state entities or other creditors).It is the treasurer's responsibility to monitor daily maturities, request or renew a surety letter, cancel or amortize past due debts, control the presentation of deferred checks, confirm payment of bills in portfolio and banks, very important in cash flow, among others.

Evaluation of all types of contracts of an economic and financial nature, evaluating the cost benefit and their profitability.

There are different types of contracts to be evaluated by the treasurer, it is important to consider the following:

• We must review the same service, different contracts in order to evaluate their scope and costs. It is important to read the entire contract and observe those clauses that we consider contrary to our interests, as well as those that are favorable to us, and discuss them with our sectorist. or bank business official. If it is within our possibilities to request the professional support of a law firm in order to absolve us, above all, of legal doubts.

The most widely used service contracts are:

• Contracts for factoring operations, Futures contracts (forwards, options), Contracts for collective loans to personnel, Contracts for electronic banking services, Contracts for collection services, Contracts for the collection of securities services, others

Supervision of the collections entered into the audit box for the documentation used to cross information.

• Although there is control of the payments made to the cashier, carried out by the cashier, it is important for the treasurer to supervise it, complying with those frequently and randomly, verifying if he is complying with the requirements regarding the use and receipt of the payment forms. collections, of the receipts extended to clients, confirming that the dates of the deposits coincide with that of the indicated documents, among others, as established.As a complement to the function of internal check to the collections entered the company we must also coordinate with the area of credit and collections, the sending of confirmatory letters of the balances of clients, as art an external check this is an excellent army to be carried out in general, that is to say to all our clients, periodically at least once every three months,or individually when we have indications of having a specific confirmation. It is important that the different users of the collection forms and receipts are also periodically asked for their respective used and in-use checkbooks, in order to check the numerical correlation, cancellations and if are being used correctly.

Supplier circularization

On a regular basis, the company must circulate to all its suppliers the status of registered accounts payable. Likewise, you could make specific queries when the situation requires, this exercise is important, and it allows us to control and verify that the operations within the treasury area are being carried out normally.

Buying selling dollars quotes

Being the dollars of much commercial use, in our environment, we must make purchases and sales of this currency, for the attention of various operations such as:

• Transfers between checking accounts of nuevos soles to dollars (purchase) or vice versa (sale), to cover overdrawn balances. Buy dollars to meet a payment from a foreign provider, or a local bank debt in dollars. Sales of dollars to meet the payment of payrolls in nuevos soles the payment of taxes.

To carry out these operations successfully and profitably, we must consider the following:

• We must quote at least three banks, including the bank in which the funds are located. Which is recommended to leave it for the last in order to negotiate from a favorable position, precisely because of having information. If we do it with another bank other than the one where our funds are, we must take into account the cost of transfer via bcr or via continue which They are also subject to a minimum amount. Once confirmed with the operation with the chosen bank, we must issue a letter to the bank, duly signed by the responsible attorneys, indicating in it the name of the person with whom we are dealing, as well as the amount of the operation and the agreed exchange rate.

Investments of surplus

It is an important function of the treasurer, to place the cash surplus evaluating the best options offered in the financial market, both in the short, medium and long term.

Among the possible investments we have:

Overnight rate, whose rate is variable (current average, in dollars 3.5%)

Foreign currency (take into consideration for valuation)

Savings: average rate: 3%

Short-term deposits: term: 0 to 360 days: 4%

Long-term deposit: more than 360 days: 4.5%

Mutual funds in the short and long term

Negotiation and control of new banking services

We consider it appropriate to quote you some new services, the importance of which we consider relevant for their applicability in your organizations, these are:

Smart card (smart cxredit) (This is a service offered by the banks to the companies to whom they grant lines of credit, which are distributed by them to their customers, assigning smart cards provided by the bank. The companies then electronically send sales information to their customers electronically. the bank proceeds to pay the corresponding amounts then the clients of the companies receive the bank account statements and when due they cancel in the companies they receive the bank account statements and at the due date they cancel in the bank windows request the charge in current account.

Payments to local providers (paylink)

This is a service provided by banks to their clients for payment to suppliers, which can be programmed online via MODEM, from the offices of client companies through this system we can pay through the bank. The pending obligations that we maintain, to the current accounts of our clients, in the bank that they designate.

Citibank pays management checks and these can also be delivered over the counter to those providers who wish to do so.

Payments to foreign providers (wordlink)

It follows the same procedures indicated in the previous point, but it is designed for payment to suppliers from abroad.

Supplier financing

This is a system facilitated by the banks, which allows the suppliers of the companies to finance themselves in advance, that is, to collect in advance their invoices issued to their clients, obviously deducting the financial cost charged by the banks.

For this purpose, both companies and suppliers must sign contracts with the bank, under the following conditions:

The companies must commit to paying the bank 100% of their suppliers' invoices, on the due dates, with the companies handling the physical handling of the invoices.

Suppliers must authorize the bank to buy the invoices issued to their customers (company) and credit their accounts with the amounts of the same.

Coverage provided by insurance companies for the transfer of money and securities

Insurance companies are quite rigorous, requiring a series of preconditions, as we will see below, to cover possible losses from robberies or assaults, we will review:

• The minimum control standards that insurance companies require from their clients, the clauses on coverage limits, and the conditions that must be met to be entitled to compensation.

Summary

The treasury area constitutes an important area in the company by financing the entire business production cycle, among its functions it is reviewed and supervised by cashier, negotiation with suppliers, management of credit options, financing lines and monitoring (audit) to the documentation using as element and information and control. The treasurer must establish constant communication with financial management in order to establish coherent policies regarding its administrative functions and in favor of the profitability expected by the company.

Work carried out by Lic. Adm. Alejandro Ulises Morón Espinal with higher studies at the Ricardo Palma University, specialization courses at post-graduate level at ESAN, U. De Lima and Peruvian Society of Economists, among others.

1. Bibliography

• Introduction to Banking by Davila Ambrosini Valdez, ed. Pacific University, Lima, 1996 Treasury Management day by day. By Pierre Hunault, publisher Deusto SA 1984. Control of Cash Flow. By Douglas Garbult, Editorial Norma, Colombia, 1990. Treasury Management with financial futures. By Ramon Adell, editorial Aeda Gestión, Spain, 1993.

TITLE: ORGANIZATION AND ADMINISTRATION OF TREASURY

AUTHOR: Lic. Adm. Alejandro Ulises Moron Espinal

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To complement this document, we suggest the video lesson "Treasury Management", from the ENyD Business and Management School, which covers the following topics: cash management, collection and payment of commercial operations and treasury budgets. Good material to deepen your learning about treasury management in the company.

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