This lesson explores the financial tools and structures used to manage working capital and intercompany funding within corporate groups. This includes practical applications of cash concentration, notional pooling, virtual accounts, and in-house banking.

7.1 Cash Concentration and Pooling

Cash concentration is a strategy that consolidates balances from multiple accounts into a single master account, allowing treasurers to “put all available funds to work” while maintaining control . Notional pooling is a similar technique that aggregates balances for interest calculation purposes without physically moving funds, offsetting debit and credit positions across accounts and currencies.

7.2 Virtual Accounts

Virtual accounts are sub-accounts of a physical bank account, used for internal tracking, reconciliation, and client segregation without requiring separate physical bank accounts. They provide granular visibility and control while reducing the administrative burden of maintaining multiple physical accounts .

7.3 Intercompany Financing and In-House Banking

Treasury must also manage “intercompany financing (including loans, repatriation, in-house banking)” . An in-house bank is a centralised entity within a corporate group that provides banking services to its subsidiaries, centralising funding, managing intercompany loans, and streamlining cash flows. Other intercompany tools include intercompany netting to offset receivables and payables, and cross-guarantees to support subsidiary financing.