SUCCESS STORY
Innovative Cash Pooling Solution
Client challenge
Our client, a multinational corporation with numerous operating companies across Europe, faced a complex cash management issue.
These entities held significant cash balances in various foreign currencies, creating inefficiencies and exposure to currency risk.
The Group Treasury sought a streamlined method to centralize these funds at the Treasury center without generating intercompany positions, thereby avoiding the complexities of loan administration.
CashMeasury's tailored solution
CashMeasury engineered a custom solution leveraging the advanced capabilities of a leading treasury management system.
Our approach involved developing functionality that automatically reads the bank account balances of each operating company. The system then initiated sweep transactions to consolidate these funds at the Treasury center. Critically, it calculated the equivalent amount in the operating company's functional currency to be returned, utilizing daily and hedge rates.
To ensure transparency and accuracy, CashMeasury also designed comprehensive reports. These reports facilitated the easy validation and confirmation of the swept amounts and the currency equivalents returned to the operating companies, ensuring complete accountability and alignment with corporate financial strategies.
Benefits for the client
Automated Transactions
Elimination of Intercompany Positions
Enhanced financial Control
The sweep transactions were automated, requiring only authorization from the treasury team.
This automation represented a substantial time saving, allowing the treasury team to focus on higher-value strategic tasks.
By returning equivalent amounts in the operating companies' functional currencies, our solution prevented the creation of intercompany positions.
This innovation eliminated the need for complex loan administration, simplifying the Group Treasury's operations.
The custom reports generated by our solution provided the treasury team with the required visibility into the transactions, enhancing control over the company's global cash management processes.
