Cash concentration: Difference between revisions

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Latest revision as of 21:59, 14 June 2024

Example:
You have 2 bank accounts (i.e. Bank X and Bank Y). For each of these bank accounts, you set a minimum of XXX 10,000. In the actual account, it appears X has XXX 15,000 while Bank Y has XXX 20,000. The difference XXX 5,000 (from Bank X) and XXX 10,000 (from Bank Y) will be transferred for a total of XXX 15.000 to Bank Account Z (Cash pool). This increases the possibility of using the surplus for other uses.

Cash concentration is the transfer of funds from diverse accounts into a central account to improve the efficiency of cash management. The consolidation of cash into a single account allows a company to maintain smaller cash balances overall, and to identify excess cash available for short term investments.

The cash available in different bank accounts are pooled into a master account. The advantages of cash concentration are

Cash control
Cash visibility

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+{{Original research|date=August 2023|reason=}}
-'''Cash concentration''' is the transfer of [[funds]] from diverse [[account]]s into a central account to improve the efficiency of [[cash management]]. The consolidation of cash into a single account allows a company to maintain smaller cash balances overall, and to identify excess cash available for short term investments.
+{| class="wikitable floatright" width="250"
-The cash available in different bank accounts are pooled into a master account.The advantages of cash concentration are
+|- style="text-align:center;"
-) Cash control
+! Example:
-) Cash visibility
+|-
-{{finance-stub}}
+|You have 2 bank accounts (i.e. Bank X and Bank Y). For each of these bank accounts, you set a minimum of XXX 10,000. In the actual account, it appears X has XXX 15,000 while Bank Y has XXX 20,000. The difference XXX 5,000 (from Bank X) and XXX 10,000 (from Bank Y) will be transferred for a total of XXX 15.000 to Bank Account Z (Cash pool). This increases the possibility of using the surplus for other uses.
+|}
+{{Unreferenced stub|auto=yes|date=December 2009}}
+'''Cash concentration''' is the transfer of [[funds]] from diverse [[deposit account|account]]s into a central account to improve the efficiency of [[cash management]]. The consolidation of cash into a single account allows a company to maintain smaller cash balances overall, and to identify excess cash available for short term investments.
+The cash available in different bank accounts are pooled into a master account. The advantages of cash concentration are
-[[Category:Financial terminology]]
+# Cash control
-[[Category:Financial terminology]]
+# Cash visibility
-[[Category:Economics terminology]]
+{{Finance-stub}}
+{{DEFAULTSORT:Cash Concentration}}
+[[Category:Corporate finance]]
+[[Category:Corporate development]]
+[[Category:Cash flow]]