Date at which banks post transactions to an account, usually the current bank working day.
Defined point of time at which payment orders must have been received by a bank in order for the transaction to be processed on that same day. Cut-off times may vary from bank to bank and depending upon type of order. For example, the cut-off for urgent payments may be later in time than the cut-off for mass payments.
See cash pooling.
This term applies in general to automated processing of electronic bank statements, disposition of bank accounts as well as organization of cash pooling.
Also called cash concentration. Cash pooling in general describes the pooling of liquid funds in bank accounts. This is usually done to avoid accumulation of debit interest and to negotiate better interest conditions with banks.
In cash pooling, rule-based account transfers are made between one or multiple subaccounts and one header account (also called master account). The defined hierarchies may have several levels. Definitions may cover the transferal of fixed amounts or replenishment or draining of subaccounts to a specified base amount. If the balances of the subaccounts are to be brought to zero, this is also defined as zero balancing.
A particular form of cash pooling is the so-called notional pooling. The currency balances of several bank accounts united in a notional pool are offset/balanced against each other for interest calculation as if they were one single account. The accumulated interest is credited to the defined master account of the notional pool. Cash pooling is usually a service offered by banks, but it is normally restricted to the accounts with banks of the same bank group.
Common Global Implementation, an initiative for global use of XML-based payment formats in compliance with ISO Standard 20022, http://www.swift.com/corporates/cgi/index?lang=de_DE.
Acting in accordance with legal requirements as well as the rules of good corporate governance.
Economic entity against which there is in effect an account receivable claim, usually a customer, cf. creditor.
Disposition of bank accounts encompasses determination of underfunding or overfunding usually over a period of one or two days as well as allocation of liquid funds in the right amount, at the right time, and in the appropriate currency.
A business transaction not based upon real economy transactions, i.e. the delivery of goods or services. Financial transactions also encompass loans and securities trading as well as transactions with foreign currencies, money market and derivative financial transactions such as options, swaps etc. The latter are occasionally also named treasury deals.
Virtual bank at which the companies affiliated to a corporate group maintain current accounts which are used to offset/balance mutual claims and liabilities. The virtual bank is usually owned by the corporate group's or subgroup's holding company or by a financing company. Balancing group-internal claims and liabilities through the inhouse bank leads to a shift in debtor or creditor, respectively. The position of the original group-internal debtor or creditor is then taken by the company running the in-house bank.
Contract partner in concluding a financial transaction, cf. financial transaction.
Economic entity in respect of whom there is in effect an account payable claim, usually a supplier, cf. debtor.
Order to a bank to withdraw money on current account from one bank account to another; the payment order is initiated by the payee, cf. bank transfer.
Part of the corporate organization for centralized processing of external payments.
Single European Payment Area, http://www.europeanpaymentscouncil.eu/.
Part of the corporate organization for centralized processing of services within the corporate group structure.
Society for Worldwide Interbank Financial Telecommunication, http://www.swift.com.
The term treasury may encompass the entirety of all financial transactions concluded by a business organization.
The term is often also applied to the organizational unit in charge of administration of financial transactions. Treasury management encompasses all activities for conclusion and processing financial transactions. The following organizational units are specified:
Front Office: conclusion of financial transactions with counterparty; Middle Office: risk assessment, controlling, and assuring compliance; Back Office: master data administration, monitoring communication, interest and foreign-currency fixing.
Order to a bank to transfer money on current account from one bank account to another; the payment is initiated by the payer, cf. direct debit.
The value date defines the beginning or end of interest calculation.
Transferal of payment means from one economic entity to another.
Payments between a group-affiliated company and a non-affiliated third party.
Account movements not initiated by the account holder are defined as externally initiated payments. This includes in particular incoming customer payments and payment of direct debit orders as well as interest and fee positions as well as account movements associated with cash pooling. Contrary to self-initiated payments, any predictions of externally initiated payments are usually not very accurate.
Payment between two group affiliates.
Self-initiated payments are initiated by the holder of the bank account at issue. This includes in particular bank transfer orders, direct debit orders and payments by check. Self-initiated payments are opposed to externally initiated payments. Self-initiated payments can usually be accurately forecasted.
Notification of payment. In such a payment advice, the payment partner (payer in the event of direct debit / payee in the event of a bank transfer order) is notified about the details of a payment, e.g. invoice numbers, invoice amount, discounts. This information allows the payment partner to allocate items in the bank statement to the matching positions in his accounts receivable/payable accounting system.
Cash, book money or money substitutes such as checks or bills of exchange.