Association for Financial Professionals (AFP) Practice Exam 2025 – All-in-One Guide to Master Your Certification!

Managing financial obligations is a fundamental activity in treasury management as it directly relates to ensuring that a company's cash flow is sufficient to meet its short-term liabilities. This involves monitoring and controlling cash inflows and outflows, which helps to maintain liquidity and optimize the use of financial resources. By effectively managing financial obligations, treasury professionals can prevent cash shortages, enable timely payments, and avoid costly penalties or interest expenses associated with late payments.

In the context of treasury operations, this activity also encompasses cash forecasting, managing working capital, and aligning funding strategies with investment policies. Overall, successful management of financial obligations supports the organization's financial stability and strategic objectives.