TREASURY MANAGEMENT REPORT

CASH CONCENTRATION CONTROL

It pushes all cash balances into a single location for easier monitoring. Otherwise, the
treasury staff would be faced with a large jumble of accounts, over which it might exercise little
control.

CASH CONCENTRATION CONTROLS

Compare Verify the allocation
Review target Review excluded intercompany loan of interest income to
balances accounts. rates to market rates. subsidiaries.

CASH CONCENTRATION POLICIES

There is one key policy required for cash concentration, which is one that places responsibility
for cash concentration on a specific group within the company. The corporate treasury
department manages all cash concentration activities
All cash concentration activities shall be managed by the corporate treasury department. This
can be a surprisingly important policy in a larger firm where divisional managers may attempt to
retain control over their bank accounts.
Small-company policy. The company shall engage in cash concentration with a “physical
sweeping” strategy. All subsidiary accounts shall be designated as zero-balance, and shall sweep
into a concentration account, which in turn shall also be used as a central disbursement account.
Large-company policy. The company shall engage in cash concentration with a “cross-currency
notional pooling” strategy. All subsidiaries are restricted to accounts with a bank designated by
the treasurer. I