Treasury Acronyms

Question 1

AP

Answer 1

Accounts Payable - Money owed by a company to its creditors for goods and services that have been received but not yet paid for.

Question 2

AR

Answer 2

Accounts Receivable - Money owed to a company by its debtors for goods or services that have been delivered or used but not yet paid for.

Question 3

BAM

Answer 3

Bank Account Management - The process of managing and controlling a company’s bank accounts, including opening, closing, and monitoring account activity.

Question 4

CFaR

Answer 4

Cash Flow at Risk - A measure used to estimate the amount of cash flow that could be at risk due to market fluctuations over a given period.

Question 5

FX

Answer 5

Foreign Exchange - The exchange of one currency for another or the conversion of one currency into another currency.

Question 6

IR Risk

Answer 6

Interest Rate Risk - The potential for losses due to changes in interest rates, which can affect the value of investments, particularly fixed-income securities.

Question 7

LIBOR

Answer 7

London Interbank Offered Rate - An interest rate at which banks can borrow funds from other banks in the London interbank market.
Falling out of favor vis-a-vis SOFR.

Question 8

SOFR

Answer 8

Secured Overnight Financing Rate - A benchmark interest rate for dollar-denominated derivatives and loans that is replacing LIBOR.

Question 9

ACH

Answer 9

Automated Clearing House - A secure system to transfer funds that acts as the central clearing facility for Electronic Fund Transfer (EFT) transactions.

Question 10

EFT

Answer 10

Electronic Funds Transfer - The electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions.

Question 11

FEDWIRE

Answer 11

Federal Reserve Wire Network - A real-time gross settlement funds transfer system operated by the United States Federal Reserve Banks.

Question 12

CHAPS

Answer 12

Clearing House Automated Payment System - A British company that facilitates the processing of payments in the UK.

Question 13

SWIFT

Answer 13

Society for Worldwide Interbank Financial Telecommunication - A vast messaging network used by banks and other financial institutions to quickly, accurately, and securely send and receive information, such as money transfer instructions.

Question 14

BIC

Answer 14

Bank Identifier Code - A standard format of Business Identifier Codes approved by the International Organization for Standardization. It is also known as SWIFT code.

Question 15

BAI

Answer 15

Bank Administration Institute. BAI2 files are a cash management reporting standard widely accepted by banks across the United States for exchanging data regarding balances and transactions.

Question 16

NAV

Answer 16

Net Asset Value - The value of a fund’s assets minus its liabilities, often used in relation to mutual funds or ETFs.

Question 17

IDR

Answer 17

Interest Deposit Rate - The rate at which interest is paid by financial institutions on the cash deposited with them.

Question 18

MMF

Answer 18

Money Market Fund - A kind of mutual fund that invests in highly liquid instruments such as cash, cash equivalent securities, and high-credit-rating, short-term debt-based securities.

Question 19

CRS

Answer 19

Common Reporting Standard - An information standard for the automatic exchange of information regarding bank accounts on a global level.

Question 20

H2H

Answer 20

Host-to-host’ (H2H) is an automated solution for high volume data transfer between banks and their corporate clients. It facilitates direct communication between a corporate client’s internal systems and their financial institutions’ systems, streamlining and automating transaction processing.

Question 21

SFTP

Answer 21

Secure File Transfer Protocol (SFTP) allows treasurers to securely transfer large files like bank statements, payment files, and reconciliation reports between the bank and corporate treasury systems. Treasurers can automate repetitive SFTP transfers on a schedule for efficiency. This includes automated retrieves of bank statements.

Question 22

API

Answer 22

Application Programming Interface. APIs in treasury management software connect different systems to share cash data or execute cash management and payments workflows automatically and in real time. They sit between various cloud applications and define how these applications can interact with each other.

Question 23

ROI

Answer 23

Return on Investment - A performance measure used to evaluate the efficiency of an investment or to compare the efficiency of several different investments.

Question 24

ROE

Answer 24

Return on Equity - A measure of a corporation’s profitability that reveals how much profit a company generates with the money shareholders have invested.

Question 25

PV

Answer 25

Present Value - The current value of a future sum of money or stream of cash flows given a specified rate of return.

Question 26

CP

Answer 26

Commercial Paper - An unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories and meeting short-term liabilities.

Question 27

CD

Answer 27

Certificate of Deposit - A savings certificate with a fixed maturity date and specified fixed interest rate.

Question 28

CVA

Answer 28

Credit Valuation Adjustment - An adjustment to the valuation of a derivative to account for counterparty credit risk.

Question 29

OFAC

Answer 29

Treasurers play a significant role in ensuring compliance with the regulations set forth by the Office of Foreign Assets Control (OFAC). OFAC is an agency of the U.S. Department of the Treasury responsible for administering and enforcing economic and trade sanctions against targeted individuals, entities, and countries that pose threats to U.S. national security, foreign policy, or economy.
Responsibilities include transaction monitoring, sanctions screening of people and entities, and record-keeping and reporting.

Question 30

MTM

Answer 30

“Mark to market” (MTM) is an accounting practice used to value an asset or liability based on its current market price or the price it could be sold for in the open market. Commonly applied to financial instruments such as securities, derivatives, and other investments whose values can fluctuate with market conditions.