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Glossary of Technical Terms
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Charting Your Career: A Candid Conversation with Treasury and Finance Professionals
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Ever wonder how people built a career in treasury and finance? Were they number geeks, excel gurus, or was it all just happen-chance? Join this candid conversation with three corporate finance professionals from diverse backgrounds on their experiences in treasury and finance. Panelists will provide insight on the beginning of their careers leading up to where they are today and their goals for the future.
Essential to every industry, treasury and finance is one of the fastest-growing fields globally, offering you a lifetime of stability and opportunities for growth.
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Interested? Learn what a career in Corporate Finance could look like with the resources below.
Treasury Terms
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Tracy Butler
CTP, CFO of Sound Transit
“If corporate finance is positioned correctly, it is one of the most powerful enabling business functions that can be strategically focused, as well as the best partner for operations, senior leadership team and the Board to help a company to accomplish its goals.”
Read Tracy’s Story
Jessica Jaeger
Cash and Investments Director at D.C. Office of the Chief Financial Officer
“I am a first-generation political refugee immigrant and first-generation college graduate. When I was about 10 years old, I saw a bank commercial on TV where people were wearing nice suits and looked important. I said to myself, ‘I want to be like them.’”
Read Jessica’s Story
William Biancucci
Treasury Manager at Paylocity
“Having grown up in Venezuela and witnessing how failed economic government policies negatively impacted my family, I was determined to learn and understand the power of free market economies to help societies thrive.”
Read William’s Story
Jennifer Herdin, CTPS
Vice President of Corporate Treasury at PVH Corporation
“I wasn’t even sure what treasury was [after I graduated college], but it sounded interesting and would require working on projects with teams around the globe.”
Read Jennifer’s Story
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about afp
As the certifying body in treasury and finance, the Association for Financial Professionals (AFP) established and administers the Certified Treasury Professional (CTP) and Certified Corporate FP&A Professional (FPAC) credentials, setting the standard of excellence in the profession globally. AFP’s mission is to drive the future of finance and treasury and develop the leaders of tomorrow through certification, training, and the premier event for corporate treasury and finance.
Learn more at afponline.org.
As the global advocate for the profession, AFP, along with founding partner Invesco and partners Amazon, J.P. Morgan, Morgan Stanley and Wells Fargo, want individuals with diverse skills, mindsets and backgrounds.
Thank you to our Founding Partner
Bond Rating
Glossary of Treasury Technical Terms
A quality rating that is assigned to a bond issue to reflect both the probability of default anxd the loss given default on the issue, in the opinion of the rating agency.
Commercial Paper (CP)
Tradable promissory notes issued by companies, as opposed to banks. Companies raise funds in the short-term money market through the issuance of CP. Maturity can range from overnight to 270 days for publicly traded CP and up to 397 days for private-placement CP, but most paper issued matures in less than 45 days. CP does not usually pay interest during its term. Instead, it is issued at a discounted price and the face value is paid at maturity.
Cash Position
The quantity of cash that a company is holding at a given point in time.
Hedging
The act of taking a financial position to reduce or offset the risk posed by another financial position. This risk management strategy is used to limit the probability of loss from changes in the prices of commodities, currencies, or securities. In active hedging, an organization uses various financial instruments to reduce or eliminate risks associated with uncertain future cash flows. In passive (or natural) hedging, an organization holds both assets and liabilities in the same currency so that fluctuations offset each other.
Know Your Customer (KYC)
The due diligence procedures that a financial institution must follow to determine or verify the identity of its customers. KYC is considered a key part of anti-money laundering compliance activities.
Liquidity Management Flows
Cash flows that are employed to use an organization’s liquidity reserves in the most effective manner. If there is a surplus of funds, treasury may either (1) invest them in suitable investments, or (2) pay down existing debt. Alternatively, if there is a shortage of funds, then treasury may either (1) sell off investments, or (2) draw on available debt sources (e.g., credit lines or commercial paper issuance).
Money market
That part of the global financial market that deals with financial instruments that are easily converted to cash (highly liquid) and have very short maturities, typically one year or less. In addition, most money market instruments are debt-type securities, which are also known as fixed-income securities.
Optimal Capital Structure
The mix of long-term debt and equity that produces the lowest overall weighted average cost of capital for a firm. Also known as a target capital structure.
Target Cash Balance
The ideal amount of cash that a company wishes to hold in reserve at any given point in time. This figure hopes to strike a balance between the investment opportunity costs of holding too much cash and the balance sheet costs of holding too little.
Working Capital
The sum of a company’s current asset accounts (primarily cash, accounts receivable, and inventory) less the sum of its current liability accounts (primarily payables and accrual accounts). Also known as net working capital.
Jessica Jaeger
The corporate finance profession is powerful. Constantly advancing, expanding and evolving, treasury and finance are full of possibilities for anyone who has the desire to learn and achieve — and you don’t have to wear a pinstripe suit and be obsessed with the latest forecasting trends or a balanced budget to be part of it.
As part of AFP’s Diversity, Equity and Inclusion (DEI) Awareness Initiative, we’re featuring stories from financial professions on how they fell into the profession and advice for young financial professionals interested in careers in treasury and finance. In this interview, Jessica Jaeger, cash and investments director at D.C. Office of the Chief Financial Officer, describes her experience entering the financial field and how she navigated her career journey.
AFP: Share your experience entering the financial field.
Jaeger: I am a first-generation political refugee immigrant and first-generation college graduate. My parents were rice farmers in their homeland from the mountainous region between Laos and China. They never had the opportunity to attend any school. However, after coming to the U.S., they quickly recognized that education was key to my siblings and me succeeding in the western world. They considered education as the only way for a better life than what they knew.
One day, when I was about 10 years old, I saw a bank commercial on TV where people were wearing nice suits and looked important. Without having exposure to professional mentors or role models at the time, I said to myself, “I want to be like them.” This led me to stay focused in school and attend college where I majored in finance.
During my junior year, I landed an internship with Washington Mutual Bank, where I was exposed to different corporate functions that furthered my interest in the finance field. After graduating, I started my first full time job as a bank examiner with a focus in treasury. From there, my love and interest in a career focused on capital markets and treasury took off.
Jaeger: Stay relevant, agile, objective and curious by continuously learning. Ask for help and always be kind and generous with your time and knowledge. Lastly, be open to new challenges that may not always seem to take you in the path you want to go, as I have found it makes you a more well-rounded and valuable employee to the companies you work for.
Professionally, “be comfortable being uncomfortable.” For example, after the Washington Mutual Bank fell into conservatorship in the 2008 financial collapse, it was difficult to find work in the treasury space given the thousands of finance folks in the market looking for work at the same time. My first role back at work was a program manager in a technical sales organization that was completely different from any role I had ever held before. However, while different, I embraced it and learned quickly how to be a project manager leading a system implementation for my organization. I was able to leverage this experience to become a more informed project sponsor and participant in my next treasury role.
AFP: What advice would you give to young financial professionals just starting out in their career?
Jaeger: Bright, challenging and exciting! There will always be a need for talented finance and treasury folks. While there will be technology advances, such as artificial intelligence-driven solutions to automate many finance and treasury functions, there will always remain a need for smart, talented people to run and administer those systems.
AFP: What does the future of finance and treasury look like to you?
Jaeger: Finance and banking are traditionally white, male-dominated industries – this was true when I first entered the workforce. However, having been in the market for more than 20 years, I have seen the workplace become progressively more diverse and inclusive of minorities and women. While there is still a lot of change needed, we are moving toward the right direction. It is encouraging and aspiring, as both a minority and a woman, to see more folks like me in the workplace and increasingly taking up leadership roles.
Finance is not a cookie-cutter profession – every company, regardless of industry, requires finance professionals. Your career growth is endless! You can move across industries to broaden your knowledge of different businesses, move laterally to gain breadth of experience, and move upward for management and leadership opportunities within the same company. I have worked in every major industry (banking, technology, health care, public-sector) and was able to successfully transfer knowledge and skills I learned along the way to each workplace. Not only do you get the benefit of enhancing your skill sets and knowledge, but you also learn new business models that keep you from being complacent or bored.
AFP: What are some stereotypes of the corporate finance world you would like to debunk?
Jaeger: I never had a dedicated mentor, but I took full advantage of the support and feedback received from bosses, colleagues and external business partners throughout my career. Many of these same individuals became my best advocates, opened career doors, have led to long-term friendships, and have been my go-to’s for career advice.
AFP: Did you have a mentor, or were you part of any groups or influenced by anyone as you navigated your career journey?
The corporate finance profession is powerful. Constantly advancing, expanding and evolving, treasury and finance are full of possibilities for anyone who has the desire to learn and achieve — and you don’t have to wear a pinstripe suit and be obsessed with the latest forecasting trends or a balanced budget to be part of it.
As part of AFP’s Diversity, Equity and Inclusion (DEI) Awareness Initiative, we’re featuring stories from financial professions on how they fell into the profession and advice for young financial professionals interested in careers in treasury and finance. In this interview, Jenifer Herdin, CTP, vice president of Corporate Treasury at PVH Corporation, describes her experience entering the financial field and how she navigated her career journey.
Herdin: I started in finance when I was just in high school! I was part of a program that targeted inner-city high school students to gain experience in business. As a component of the program, I also interned at an investment bank for two summers. It was a great experience that ultimately led me to decide that I would pursue a degree and career in finance.
During and after college, my internships opened many doors for me. I was more competitive than other applicants from top tier schools since I had real-life experience that I could leverage to succeed in the role. While working towards my bachelor’s degree in International Business at New Jersey City University, I also worked full time at an investment bank. After I graduated, I realized back-office administration work was not for me and started a new job search that led me to my career.
I landed a job as a treasury analyst at Booz Allen Hamilton. I was not even sure what treasury was at the time, but it sounded interesting and would require working on projects with teams around the globe. Like most jobs, the work was operational in the beginning. However, once I learned the ropes, I was able to work on various projects that gave me lots of exposure.
Within a year, I was hooked on treasury. I found my passion and it aligned with my skillset. This job ultimately put me on the path that I am on today. The company paid for my graduate school (I got two degrees since it was free) and even transferred me to work in their London office.
AFP: Share your experience entering the financial field.
Jennifer Herdin
Herdin: Finance is a broad range of jobs that cover various sectors of a business. I would try to gain as much exposure in different functions within the organization to get a sense of what career path you will choose. If a door opens, always explore the opportunity — even if the job is not fit for you, at least you can rule out what areas you do not like.
In addition, networking is critical at all stages in your career but especially in the beginning. Do not be afraid to seek a mentor and leverage their help. When you are starting out, it is expected that you will not know everything, so the key to success is to demonstrate your aptitude and enthusiasm to learn and add value to the team and the organization.
AFP: What advice would you give to young financial professionals just starting out in their career?
Herdin: The future of finance and treasury looks complex and challenging but filled with opportunities to make improvements that help drive organizations forward in this fast-moving and ever-changing landscape.
AFP: What does the future of finance and treasury look like to you?
Herdin: I have had various mentors at different stages in my journey. I was also an active member and chair of a women’s affinity group at a prior job, which gave me a great network of strong and talented women who worked in different fields of the business. Currently, I am part of a leadership program and will be paired with an executive coach to assist me as I work to develop my leadership skills.
AFP: Did you have a mentor, or were you part of any groups or influenced by anyone as you navigated your career journey?
Herdin: Over the course of my career, I have had many opportunities to grow and challenge myself and each of those small successes helped develop my skillset. I learned from my successes and failures, and often the failures stayed with me longer and had a deeper impact.
I had my first child in 2014 and returned to work three months later. Shortly thereafter, I was asked to go to London and Amsterdam to help merge two divisional treasury teams into one corporate team. It was an amazing opportunity that I was excited for, but I was also hesitant to leave my then 5-month-old son. I spoke about my dilemma at a women’s group meeting, and someone suggested that I ask to bring my baby and a caregiver. My boss at the time was supportive and I was approved to take an au pair (aka: my mom). During those two weeks, I went to the office every day and got to know the team members, access their skillsets and determine process efficiencies. I also got to know the team outside of work and had my mom and son join us for a few dinners. At the time, I did not think I could manage such a task, but I did and I did it well. I learned so much from that journey, but the most important thing that I learned was that it is okay to ask for help.
AFP: Have you accomplished anything big for your organization? Or what’s a big win you’ve had on your career?
Herdin: Non-finance people tend to think that we corporate types are stuffy and boring — they clearly have not been to some of the AFP gatherings! I have met so many interesting, smart and altruistic people along my journey.
AFP: What are some stereotypes of the corporate finance world you’d like to debunk?
William Biancucci
The corporate finance profession is powerful. Constantly advancing, expanding and evolving, treasury and finance are full of possibilities for anyone who has the desire to learn and achieve — and you don’t have to wear a pinstripe suit and be obsessed with the latest forecasting trends or a balanced budget to be part of it.
As part of AFP’s Diversity, Equity and Inclusion (DEI) Awareness Initiative, we’re featuring stories from financial professionals on how they fell into the profession and advice for young financial professionals interested in careers in treasury and finance. In this interview, William Biancucci, treasury manager at Paylocity, describes his experience entering the financial field and how he navigated his career journey.
Biancucci: I was inspired to pursue my undergraduate studies in economics, finance and international business through the Honors College program at the University of Illinois at Chicago after taking an introductory economics course taught by Dr. Evelyn Lehrer, an excellent professor, well-published, and bright economist. I had a very positive experiencing learning from a Latina economist originally from Chile and little did I know that it would set the foundation of a career in finance.
Having grown up in Venezuela and witnessing how failed economic government policies negatively impacted my family and close friends, I was determined to learn and understand the power of free market economies to help societies thrive. I wanted to solidify my understanding of the markets by working in the financial field to help my family and community succeed by staying abreast of financial markets and sharing that knowledge with them.
I started out in a corporate accounting role at major investment bank in New York City, and a few years later found an opportunity at McDonald’s Corporation treasury team that incorporated corporate finance, risk management, investments, and working cross-functionally with colleagues in other functions around the world. The role was exciting, challenging and intellectually stimulating, and I was lucky to work with and learn from highly accomplished and talented treasury professionals with global banking experience.
AFP: Share your experience entering the financial field.
Biancucci: Have an open mind, continuously ask yourself how you can improve your skills and processes in any organization that you work in, and stay intellectually curious. The world of finance is constantly evolving, so reading consistently about financial topics that interest you is imperative to continue growing professionally. I stay abreast of the markets by reading The Morning Brew, Robinhood snacks, Wall Street Journal The New York Times, The Economist and CNBC.
Network with professionals with careers that are of interest through LinkedIn. Take some calculated risks if there are opportunities to expand your financial and professional toolkit beyond your current scope (whether internally or externally) and seek out mentors who will provide guidance and support as you navigate your career. Leverage your school’s network and professional organizations such as the Association for Financial Professionals, Alpha Kappa Psi, and Beta Gamma Sigma to learn from professionals in the field and secure one or two internships in different areas of finance. That way, you have a better sense of which ones you enjoy the most and least before starting a full-time position. There is a lot of variety within finance, and each area has aspects that suit people differently.
AFP: What advice would you give to young financial professionals just starting out in their career?
Biancucci: Treasury’s key role as a strategic partner to any organization’s leadership to better protect its assets and manage its growth will continue to increase in the marketplace as access to information through technology expands and competition increases.
Artificial intelligence will continue to drive automation, and financial transactions will be expedited through the adoption of blockchain technologies and cryptocurrencies, particularly Etherium. The financial system is quickly evolving and FinTech companies are accelerating that evolution to facilitate transactions, and access to capital in a more efficient manner. Technology will continue to drive change in all industries, and finance is no exception. Treasury professionals need to continue to learn and stay abreast of market trends and advancements in the field. They need to understand how emerging technologies can help to streamline and optimize processes to better manage liquidity, counterparty and foreign exchange risks to help organizations continue meeting its financial and organizational objectives.
Diversity and inclusion initiatives, as well as retention of diverse talent, will continue to play a key role in any organization’s competitive advantage and be top of mind as organizations grow and serve a broader set of customers with increasing purchasing power and financial literacy. The increased representation of communities of color in the treasury and finance profession will play a key role in any organization’s success. I have been actively involved in helping drive that increase of diversity and representation throughout my professional network by actively engaging with and mentoring first-generation college students from historically under-represented minorities in business, as well as facilitating financial literacy programs through organizations such as Junior Achievement and Sprouting Leaders, which primarily help elementary through high school students from under-served communities.
AFP: What does the future of finance and treasury look like to you?
Biancucci: I did have and continue to have mentors who have provided valuable insights, guidance, and unique perspectives as I advance in my career and help others succeed professionally. I have also been fortunate to benefit from and give back to organizations that help under-represented minorities in business such as the Association of Latino Professionals for America (ALPFA), the Hispanic Scholarship Fund (HSF) and Management Leadership for Tomorrow (MLT). It has been a wonderful ride thus far, and I look forward to continuing to make a positive impact throughout the rest of my professional journey. I was inspired by the leadership of those organizations including that of Damian Rivera, Fidel Vargas, and John Rice, who have used their knowledge, experience and influence to advance causes that are important to me and significantly improve the lives of communities of color and under-represented minorities in business for generations to come.
AFP: Did you have a mentor, or were you part of any groups or influenced by anyone as you navigated your career journey?
Tracy Butler
The corporate finance profession is powerful. Constantly advancing, expanding and evolving, treasury and finance are full of possibilities for anyone who has the desire to learn and achieve — and you don’t have to wear a pinstripe suit and be obsessed with the latest forecasting trends or a balanced budget to be part of it.
As part of AFP’s Diversity, Equity and Inclusion (DEI) Awareness Initiative, we’re featuring stories from financial professionals on how they fell into the profession and advice for young financial professionals interested in careers in treasury and finance. In this interview, Tracy Butler, CTP, CFO of Sound Transit, describes her experience entering the financial field and how she navigated her career journey.
Butler: When I graduated from college, I did not know exactly what I wanted to do with my business degree. I entered consulting where I could have real-world exposure on all aspects of business: from finance to organizational design, to human resource and beyond. As a consultant, I helped companies identify opportunities to grow their business and increase efficiency. While finance was an element of the scope as part of management consulting, it was also the most essential in my mind as robust financial planning is imperative to ensure sustainable long-term business growth and financial resources alignment to strategic priorities. Eventually, I entered the more specialized financial field, creating long-range financial plans, capital expansion plans and financing strategies.
AFP: Share your experience entering the financial field.
Butler: My first piece of advice is to be open-minded. Be open to new ideas and different perspectives, and always look for opportunities to improve. Do not do things because it has “always been done this way.” I was able to take on more responsibilities over time in different areas of finance because I was always willing to learn new things and explore new areas; the experiences and mindset prepared me for my current role as the CFO.
Secondly, be curious. Ask questions, actively listen, learn what your customers and partners and supervisors need, and understand issues fully before jumping to solutions.
AFP: What advice would you give to young financial professionals just starting out in their career?
Butler: The future of finance and treasury includes better data-driven decision-making with better reporting through automation and data intelligence; more collaboration and business partnership between finance and operations; and a more value (vs. cost) focus. In addition, finance and treasury should eventually have a balance of short-term goals with long-term outcomes when evaluating business investment opportunities.
AFP: What does the future of finance and treasury look like to you?
Butler: I am a natural learner, so I see opportunities to learn through every interaction and from almost everyone I cross paths with. I have learned from both great leaders and individuals who did not have the right skill or mindset to do the job over. I also believe in the importance of developing technical and soft skills. Many financial professionals place so much emphasis on technical skill development, but the emotional intelligence and soft skills are what get you to the senior and executive levels.
AFP: Did you have a mentor, or were you part of any groups or influenced by anyone as you navigated your career journey?
Butler: I have helped my organization to secure the highest credit rating in the country; closed the first and only federal Master Credit Agreement with four loans in the total amount of $2B; and have transformed our finance team from a compliance-driven, report-intensive function to strategic partner to customers to collaboratively accomplish business objectives.
In addition, I have led my team to integrate short-term budgeting with long term financial planning to ensure alignment of resources with strategic priorities. We now no longer focus on cost cutting and historical performance and instead focus on creating values, maximize benefit and optimize decision-making.
AFP: Have you accomplished anything big for your organization?
Butler: Oftentimes, the finance function is perceived as risk adverse, compliance-driven and solely cost-focused. If corporate finance is positioned correctly, it is one of the most powerful enabling business functions that can be strategically focused and value focused, as well as the best partner for operations, senior leadership team and the Board to help a company to accomplish its goals.
AFP: What are some stereotypes of the corporate finance world you would like to debunk?
Agile
Glossary of FP&A Technical Terms
Agile software development is an approach to creating and implementing software through “collaboration between self-organizing, cross-functional teams utilizing the appropriate practices for their context.” Note that Agile (capital A) is an iterative approach to software development; agile (lowercase) describes business operations, including flexibility, responsiveness, and speed. They are overlapping but not identical concepts. For software implementations such as FP&A planning systems, a 100% agile approach is not recommended (see guide for additional discussion).
API (Application program interface)
The code that allows different systems to communicate (send, receive, or write) with each other. Some software applications have pre-built APIs to connect to various source systems, while other APIs need to be custom built and maintained.
Business intelligence (BI) vs business analytics
There is not consensus on the definitions. BI are a set of tools that gather and present information, often visually, that explain what happened. Analytics explain why things happen, and may be more manual in order to dig into the answers.
Cloud vs on-premises computing
Traditionally, organizations have built data centers they own that contain the IT resources needed to achieve the organization’s objectives. For those companies where ownership of their IT infrastructure is not a source of competitive advantage, they have turned to the cloud. Cloud computing is the on-demand delivery of compute power, database storage, applications, and other IT resources through a cloud services provider via the internet with pay-as-you-go pricing (also referred to as SaaS—software as a service).
Database
A database is an organized collection of data through various objects, including schemas, tables, queries, reports, and views. The data are typically organized to model aspects of reality in a way that supports processes requiring information, such as modeling the availability of rooms in hotels in a way that supports finding a hotel with vacancies.
Driver-based planning
Driver-based budgeting and planning uses operational driver models to predict financial results using estimates of business driver values. These models are essentially equations that represent mathematical relationships between key operational drivers—such as volume, rates, utilization, conversion ratios, and brand awareness—and anticipated financial outcomes.
ERP
An integrated system of applications that share a database and interface. Modules may include accounting general ledger, inventory management, procurement, human capital management, and various reporting functions.
Machine learning
ML is learning from data without being explicitly programmed. In supervised models, a target variable is provided and the model will identify other variables associated with the target. Examples of supervised models include classification (predict a categorical value) and regression (predict a numerical value). Examples of unsupervised models include cluster analysis (organize similar items into groups) and associative analysis (find rules that capture associations between items).
Sandbox
For a planning solution, the concept of a sandbox refers to the ability to work with the system tools in a non-production environment. This is useful to develop and test models, perform “what-if” modeling, simulation, and scenario analysis around key business drivers in a separate version and/or area where the results can be compared to other versions.
Streaming data
Data that is generated constantly by a data source. Streaming data is different from static data that can be analyzed after collection. Algorithms that are iterative or analyze a complete dataset can’t be used.
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