Treasury management is the organisational function responsible for managing a company’s financial resources and financial risks: ensuring that the business always has sufficient liquidity to meet its obligations, managing the investment of surplus cash, raising and maintaining the financing facilities the business needs, and hedging or managing the currency, interest rate, and commodity price risks that arise from the business’s operations and financing. In large GCC enterprises, treasury management is a separate function within the finance structure — distinct from financial reporting, FP&A, and tax. In smaller organisations, the CFO or a senior finance manager performs the treasury function alongside other responsibilities.
In the Context of Egypt and the GCC
Treasury management in GCC enterprises involves specific regional considerations that distinguish it from treasury in other markets. The SAR, AED, BHD, and OMR are pegged to the USD, creating a stable currency environment for GCC-on-GCC transactions — but exposing GCC enterprises to the indirect effect of USD monetary policy on the GCC business environment. In Egypt, treasury management must navigate periods of EGP volatility that affect both the funding cost (Egyptian interest rates reached 27.25% in 2024 as the Central Bank responded to inflationary pressure) and the currency risk on USD-denominated obligations. Finance leaders of GCC groups with Egyptian operations must manage treasury policy for Egyptian subsidiaries separately from GCC entities — different currency exposures, different funding costs, and different liquidity management challenges require distinct treasury approaches.
The Core Treasury Functions
Treasury management encompasses five operational areas. Cash management: ensuring that the right amount of cash is in the right entity and the right currency at the right time — the daily operational liquidity function. Funding and debt management: maintaining the financing facilities the business needs, managing the maturity profile of debt, and accessing new funding when required. Investment management: deploying surplus liquidity in appropriate instruments that balance return, risk, and liquidity. Financial risk management: identifying, measuring, and hedging currency, interest rate, and commodity price exposures. And banking relationship management: managing the relationships with the business’s banking counterparties, negotiating facilities and terms.
What Goes Wrong
The most common treasury management failure in GCC enterprises is inadequate cash flow forecasting — the consequence of which is discovering a liquidity shortfall at short notice rather than with sufficient lead time to address it through planned funding. A thirteen-week rolling cash flow forecast, updated weekly with actual receipts and payments, is the standard treasury tool for managing near-term liquidity. Finance leaders who manage liquidity from the balance sheet snapshot (bank balance at each month-end) rather than from a forward-looking cash flow forecast are managing to a figure that is always one month old by the time they see it.
How Loop Wise Solutions Encounters This
In EPM planning implementations, we connect the treasury management function to the financial planning model — building the thirteen-week cash flow forecast as a direct output of the EPM actuals and forecast data, rather than as a separately maintained treasury spreadsheet. This connection ensures that the treasury team’s cash flow view is consistent with the finance team’s operational assumptions, rather than being a separately built forecast that diverges as assumptions change.
