Key Difference – Treasurer vs Financial Secretary
Treasurer and Financial Secretary are two important personnel in a company, but these two words are often confused due to the perception that they perform similar roles. This is partially reasonable since both roles are performed by a single person in some organizations while others employ two different personnel. The key difference between treasurer and financial secretary is that treasurer is the person responsible for running the treasury ( the process of managing the financial assets) in an organization whereas financial secretary receives, records, and deposits the funds received by the company through business activity in a timely manner. Both the treasurer and financial secretary has an important role to play in ensuring a smooth flow of business operations.
Who is a Treasurer?
A treasurer is the person responsible for running the treasury (process of managing the financial assets) in an organization. Treasurer is usually the head of the corporate treasury department and plays an important role in managing the overall financial risk of the company.
Main Responsibilities of a Treasurer
Some of the main responsibilities of the treasurer are as follows.
Liquidity Risk Management
Liquidity is the ability to meet cash and collateral obligations. When the company has more illiquid assets compared to liquid ones, then it is faced with liquidity risks. Such situation has to be managed effectively by the treasurer.
Cash management is the process of collecting and managing cash and is a key aspect for ensuring the company’s financial stability. Making short term investments when there is a cash surplus is one of the main duties of the treasurer.
Foreign Exchange and Interest Rate Hedging
Hedging is used to mitigate the risk associated with a future transaction. Interest rate hedging can be used to avoid uncertainty regarding a future interest rate while foreign exchange hedging is used to avoid uncertainty regarding a future exchange rate risk.
This includes managing and providing financial advice on investing opportunities in order to improve the return for shareholders. A number of securities such as shares and bonds are available for investments.
Who is a Financial Secretary?
Financial secretary receives, records, and deposits the funds received by the company through business activity in a timely manner. The financial secretary must work closely with the treasurer and finance manager and provide them with necessary financial information for decision making.
Main Duties of a Financial Secretary
Following duties should be performed by the financial secretary.
- Receive and record all the transactions in the ledger indicating all the relevant information for each transaction
- Make note of any refunds or disbursements that need to be made
- Give the treasurer sales slips and invoices for payment by check
- Reconciles the financial records quarterly against the records of the treasurer and investigate discrepancies if there are any
- Assists to ensure that the financial records are complete and in good order for annual audit purposes
- Provide additional information for internal auditor upon request
What is the difference between Treasurer and Financial Secretary?
Treasurer vs Financial Secretary
|Treasurer is the person responsible for running the treasury ( the process of managing the financial assets of a business) of an organization.||Financial secretary receives, records, and deposits the funds received by the company through business activity in a timely manner.|
|Treasurer has high decision-making authority since he or she has to make a number of decisions relating to financial risk management.||Decision-making authority of financial secretary is minimal as his or her work is limited to reporting financial information.|
|Treasurer is an occupation that involves a high risk since it is equipped with making major decisions such as hedging.||Financial secretary performs less risky duties compared to the treasurer, thus the inherent risk in the occupation is low.|
Summary- Treasurer vs Financial Secretary
The difference between treasurer and financial secretary preliminarily depends on the nature of duties they are assigned to perform. Cash management, liquidity risk management, foreign exchange and interest rate hedging are the main duties performed by a treasurer. Duties of the financial secretary revolve around making financial information available for the use of treasurer and financial manager through reports for decision making. It is vital for both the treasurer and financial secretary to work in amalgamation since the nature of their jobs complements each other.
1. Dr. Heinrich Degenhart, VDT Board Member. “The Functions of a Corporate Treasury.” TMI RSS. N.p., n.d. Web. 19 May 2017. <https://www.treasury-management.com/article/4/121/1053/the-functions-of-a-corporate-treasury.html>.
2. Hawley, Julia. “Treasurer: Job Description & Average Salary.” Investopedia. N.p., 22 Jan. 2016. Web. 19 May 2017. <http://www.investopedia.com/articles/wealth-management/012216/treasurer-job-description-average-salary.asp>.
3. CAPTA Toolkit. N.p., n.d. Web. 19 May 2017. <http://toolkit.capta.org/finance/financial-officers/financial-secretary-duties/>.
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