The treasurer is the person responsible for the custody and supervision of a business's funds. The office of the treasurer had its antecedent in English government which codified the organization, purposes, and general responsibilities of the business corporation during the 17th century when activities in worldwide colonization and trade exploded.
Corporate law, among other things, provided for a tripartite executive branch of president, secretary, and treasurer. States of the United States adopted this model, modifying it as necessary. All 50 states require the inclusion of these three officers. The corporate bylaws more specifically define their powers and responsibilities.
Ordinarily, the treasurer provides for the custody and supervision of all funds. Through a system of accounting controls and procedures, the treasurer tracks, in detail, the origin and utilization of funds. The treasurer employs, at a minimum, a series of standardized reports and analyses, integrating the dollars, volume of sales or production, number of employees, and financial costs into a series of ratios and percentages that assist management in evaluating progress and profitability.
Many businesses separate the reporting from the funds management functions. The resulting specialization has the controller performing tasks for the treasurer. The controller oversees the reporting and analysis of the sources and utilization of funds. Reporting directly to the treasurer, the controller is responsible for the accounting function. In this situation the treasurer manages the actual funds.
As an officer of the corporation, the treasurer has various corporate and accounting responsibilities. On the corporate level, the treasurer may transfer capital stock. The treasurer also maintains unissued (treasury) capital stock, performs due diligence (an evaluation) on financial and debt instruments, and records and transfers bonds on the company's books.
Accountable to the stockholders, the treasurer maintains capital stock records, signs checks for deposit, makes deposits, develops and maintains relations with financial and banking institutions, serves on the board of directors, and performs other duties that promote the profitability and objectives of the business. In conjunction with the other officers, the treasurer may transfer stock, sign checks for payment, borrow money, make long-term investments, sign contracts, repay debt, and distribute dividends. The treasurer may also be responsible for the administration of employee benefits plans, such as pension funds, 401(k) plans, employee stock purchase plans, and employee stock options.
In the capacity of chief accountant, the treasurer protects, from a "book" standpoint, the business assets by keeping track of their use and disposition. To prevent fraud and to ensure profit, the treasurer exercises a plethora of controls. These include the detailed recording (accounting) of all financial activities, the discharging of all liabilities arising from debt, credit, and taxation, and the overseeing of a management risk policy including interest rate risk, foreign currency risk, and insurance coverage. The treasurer also directs the tax accounting and the auditing functions. For budget and business planning purposes the treasurer disseminates accounting and financial reports as appropriate.
As custodian, the treasurer supervises the collection and recording of cash receipts, manages the securing of credit, arranges debt financing and repayment, and invests excess funds. Through various planning and analytical tools, the treasurer ascertains cash balances, forecasts future needs, arranges for debt financing, invests excess funds, establishes the sales credit policy, and ensures the collection of receivables. In addition the treasurer signs and distributes the payroll.
An unincorporated business assigns concomitant duties to its treasurer where applicable. In either situation, the treasurer's office is the central processing area of the financial and personnel data required to construct intelligent budgets, to efficiently manage credit and excess funds, to establish long-term financial plans and strategies, and to identity the degree of operational productivity.
Because of the complexities of business and financial markets, businesses seeking a treasurer look for a qualified employee with substantial experience as an accountant, preferably as a certified public accountant (CPA). In addition, even the smallest business needs a computer literate employee able to maintain computer accounting systems, perform spreadsheet analyses, create analytical models, and dabble in desktop publishing.
[ Roger J. AbiNader ,
updated by David E. Salamie ]
Gotthilf, Daniel L. Treasurer's and Controller's Desk Book. 2nd ed. New York: AMACOM, 1997.
Malburg, Christopher R. Controller's and Treasurer's Desk Reference. New York: McGraw-Hill, 1994.