With an In-house bank, Treasury can offer subsidiaries banking services under its own terms, removing the need for external banks and separate bank accounts for the units while lowering overall banking costs.
Automating the reconciliation and reporting of your global cash positions enables you to gain real-time visibility. This allows reliable cash forecasts and a better use of the group’s cash assets.
You’re also able to reduce the amount of time it takes for your month end closing. In some cases, reducing it from 3 days to 3 hours.
Better visibility of trapped cash and subsidiary transactions has a clear impact on liquidity. Customer examples have shown that the share of working capital tied to operations can be reduced from 10% of net sales down to 1%.
Create a single and secure payment process for both internal and external payments. Your bank account statements are always up-to-date while reconciliation of internal transactions is fully automated.
Cover your short-term financing needs and eliminate the situation where one subsidiary is forced to use its account credit limits while another subsidiary has surplus cash in its account. This diminishes the need for lending altogether, as the net sum of the whole group can be used for payments and investments.
Calculating the interest is a standard functionality in an in-house bank. It eliminates the need to process the transitory items for each, internal short-term loan. The interest can simply be calculated and added to the internal account at the end of each month.
Centralized cash outflows significantly improve the safety and control of the payment process as well as mitigate the risk of payment fraud.
All POBO transactions can be automatically allocated and posted to bookkeeping just like external transactions.
Eliminate unnecessary external bank relationships, which gives higher cash concentration and decreases overall banking costs.
Centralizing the cash and collection of receivables at a group level can have a formidable impact on the working capital management of the entire organization. Meanwhile subsidiaries are offered an efficient tool and process for reconciliation and exception management on top of their AR.
If the original creditor can be identified, the reconciliation of the incoming transaction can be fully automated bringing significant efficiency gains.
These accounts can be either owned and maintained by the group treasury, in which case all the account statement transactions are allocated to the correct subsidiary, or they can be owned by the subsidiaries themselves, with agreed daily or weekly sweeps to the group treasury account.
