Cash concentration: Difference between revisions
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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. |
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. |
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'''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. |
'''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. |
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The cash available in different bank accounts are pooled into a master account.The advantages of cash concentration are |
The cash available in different bank accounts are pooled into a master account.The advantages of cash concentration are |
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1) Cash control |
1) Cash control |
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2) Cash visibility |
2) Cash visibility |
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{{DEFAULTSORT:Cash Concentration}} |
{{DEFAULTSORT:Cash Concentration}} |
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[[Category:Corporate finance]] |
[[Category:Corporate finance]] |
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[[Category:Cash flow]] |
[[Category:Cash flow]] |
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Revision as of 12:51, 1 July 2020
| Example: |
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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. |
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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 1) Cash control 2) Cash visibility
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