Transferring into the Treasury Department (#340)

Comparison of Accounting to Treasury

A lot of people think that accounting and treasury are adjacent fields. And, to some extent, that’s true. After all, people in these fields are deeply concerned with money. But there are significant differences. At least for a CPA, accounting is really about memorizing a lot of rules and figuring out their real-world application. Which sounds a lot closer to the legal profession than it does to treasury.

And for someone like a bookkeeper, the emphasis is more on process, so that you complete the same transaction the same way, every single time, with no mistakes. Which sounds a lot closer to the process engineering profession than it does to treasury. So in short, switching over to treasury could take you somewhat out of your comfort zone.

In treasury, the emphasis is on tracking cash going in and cash going out, and deciding how to manage it while you have the cash in-house. And you can throw in some fund raising and risk management, too. These are not traditional accounting activities, though you might see some of this going on in a smaller accounting department – and really just because the business is too small to afford a separate treasury function.

So, your first consideration is whether you think you can adapt to some job requirements that may vary quite a lot from what you were doing before. For example, consider a situation in which you’re hired into the treasury department, and all you’re doing is forecasting cash receipts for a bunch of retail stores. Is that what you want to do? Or, what if you’re given responsibility for hedging the company’s foreign exchange positions? Is that inside your comfort zone? Or, maybe the task is fund raising, and you’re sent out to do road shows along with the CFO and investor relations officer. Is that OK? I can’t answer any of these questions for you. You need to figure out your own comfort level. Just be aware that you can’t just switch over into treasury and think that you’ll be deep in your comfort zone. Because you might not be.

So, my tone just then was a bit cautious. Let’s look at this from a more optimistic viewpoint. If your target is to eventually become a CFO, then a tour through the treasury department is a good idea. After all, the CFO oversees the treasury department, so you’re going to need to know what it does.

The Treasury Tour

But, if that’s the case, your goal is to get an actual tour through the department, which means some sort of arrangement where you’re guaranteed a certain minimum amount of time in each treasury function, after which you move into the next slot in the department, and the next slot, and so on. You might be there for just a couple of years. The problem is that the treasurer isn’t going to agree to this arrangement, because from his or her perspective, it’s not efficient for you to keep moving around in the department. The treasurer just wants you to stay in one place and get good at one job.

So, how do you get one of these tours of duty? That’s by being recognized by senior management as an up-and-coming star, who needs to be moved through the organization to soak up as much experience as possible. If you’re not in that situation – and most of us are not – then you’re not going to get a tour of duty in treasury. Instead, if you switch into treasury, then the treasurer expects you to stay there for a number of years.

Reasons to Switch to Treasury

So, let’s assume that you want to switch into treasury and stay there. Why would you do that? A good reason is that you’ve topped out in the accounting department, and it doesn’t look like there are any more promotions coming. If so, why not try something new?

Another good reason is that the compensation levels in treasury can be higher than in accounting. That depends on a lot of things, like your geographic region, and whether you have the right skills, and whether there’s lots of demand and not much supply for the specific job you’re targeting. But if all of that aligns, then – yes – you can possibly make more money in treasury. If you’re driven by money, then that’s a good reason to switch over.

Now, here’s a reason not to. With very few exceptions, only larger organizations have treasury departments. So if you want to make a career out of treasury, just keep in mind that you’re now limiting your employer choices to pretty large businesses. Getting a treasury job in a small company just isn’t an option. That has a couple of ramifications. One is that there are simply fewer treasury jobs than there are accounting jobs. A lot fewer. So in a tight job market, you might have a really hard time finding employment. You might think that you can just switch back into accounting if you have to, but if you spend a bunch of years in treasury, then any employer will look at your resume and think that maybe your accounting skills are a bit dated.

Another issue is that these large companies are mostly located in large cities – which means that you’re going to have to move there. Are you comfortable doing that? If you like the rural lifestyle, treasury could be a difficult career choice. And this isn’t one of those professions where you can do it entirely from home. You’re actually going to have to go into the office from time to time.

So in short, switching into treasury is an interesting idea, but you need to think through all of the pluses and minuses before taking that step.

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