This lesson examines how treasury organizes its bank account structures to maximize visibility and control over cash, a prerequisite for effective cash management.

2.1 The Importance of Cash Visibility
Gaining insight into current and future cash flow across all business units is critical to meet short- and long-term obligations of the business at the lowest cost . Without a clear view of cash positions, treasury cannot make informed investment or borrowing decisions.

2.2 Cash Concentration Structures
Cash concentration is a strategy that empowers treasurers with automated solutions to put all available funds to work, meeting unique needs of each line of business while still maintaining control via intercompany reporting and settlement . Multiple cash accounts are consolidated into concentrated pools, creating a header entity that offsets short positions in some business units by using funds from units with surpluses. It is perhaps the most widely used strategy . Benefits include simplifying treasury management processes, enabling better investment decisions, and leveraging balances to drive better yields .

2.3 Notional Pooling
Notional pooling is a similar technique that allows cash optimization by consolidating the balances of multiple accounts, often in different currencies, without physically moving funds . Instead of moving funds, notional pooling tracks the balance and calculates interest or charges based on net positions of all accounts in the pool . This supports short-term working capital needs by offsetting debit balances with credit balances elsewhere, without moving money around . It is useful for global businesses operating in various currencies, as funds in one currency offset deficits in another, reducing FX costs .

2.4 Virtual Accounts
Virtual accounts are a complement to either physical cash concentration or notional pooling. They allow an organization to cut the number of operating accounts and reduce associated costs and risks . A virtual account is a sub-account of a physical account used for internal tracking without adding a new bank account.