It is a great example of how TreasuryTechnology can support companies facing cash challenges, while also providing flexibility for other corporates to optimize their treasury operations.

In this and upcoming episodes, I'll dive deeper into the solution - so be sure to 'like' this post to stay updated.

The solution consists of 4 main elements:
🟩 1) TMS-initiated automated sweeping
🟩 2) TMS-initiated Payment-On-Behalf-Of (POBO)
🟩 3) TMS-initiated non-cash intercompany settlements
🟩 4) TMS-initiated reporting to multiple ERP systems

In this Episode 1:
The benefits of TMS-initiated automated sweeping

🟩 Centralized cash at Treasury Center
- With your TMS, you can initiate sweeping transactions to automatically sweep cash between your treasury center and operating companies.
- You can factor in intraday credits, debits, and pending payment files.

🟩 No need for Cash Pooling Agreements and Daylight Overdraft Limit (DOL)
- Banks require extensive documentation to set up cash pooling in their systems - a process that can be time consuming -
- To make payments from zero-balanced accounts, a Daylight Overdraft Limit (DOL) is typically required. This comes with additional requirements, such as a parental guarantee from the parent company.

🟩 Cross-bank pooling
- With a TMS, you can seamlessly initiate cross-bank sweeping, giving you full control over your liquidity movements.

🟩 Eliminate Monthly Sweep Charges & Save Costs!
- The cost of bank cash pooling can be a key reason to switch to TMS-initiated cash sweeping.
- With bank-initiated cash pooling, you typically pay €20 per month per account. That adds up quickly.
- Also a Daylight Overdraft Limits (DOL) is not for free.

🟩 Flexible Sweeping: Optimize Frequency & Scope!
- Not all bank accounts require daily sweeping—weekly sweeps may be sufficient for some.
- With TMS-initiated cash sweeping, you can customize sweeping frequencies and create subsets of bank accounts, assigning different schedules based on your liquidity needs.

These benefits were leveraged to develop the optimal solution for the client.

In the next Episode we will discuss: TMS-initiated Payment-On-Behalf-Of (POBO)
​
This article was publised earlier on LinkedIn.