Notional Cash Pooling enables you to pool the debit and credit balances of your accounts virtually. You can improve the interest terms on a group of accounts held by your company and optimise your cash flow utilisation, without having to transfer funds physically.
How does it work?
- You define a consolidation group containing the entities whose bank accounts you want to consolidate virtually. This consists of groups of accounts belonging to several legal entities (parent company and subsidiaries), held in several countries or denominated in different currencies.
- You draw up a cash pooling agreement between the different entities concerned, which must be signed by the subsidiaries and the parent company. The purpose of this agreement is to define the consolidation rules (specifically, the sharing of interest between the businesses), respecting the specific legal requirements in the relevant countries.
- Cash pooling also requires the opening of group current accounts in the name of each subsidiary in the books of the corporate treasury.
- Once this in place, interest is calculated based on the consolidated balance, at group level, for all the accounts denominated in the same currency.
- Simplifies cash flow management while maintaining the autonomy and ownership of the cash for the different entities of the same group.
- Visibility and control: optimised overview of all your cash positions, thanks to the application of BNP Paribas Fortis reporting (Notional Pooling Module). In this way, you achieve better control of your cash.
- Optimise your financial costs: no transfer costs, as you do not have to perform transfers from one account to another. You also reduce or eliminate overdraft costs.
- Profitable: you receive interest on the cumulative balance of the accounts denominated in the same currency rather than separately, account by account.
- Flexible: you can pool accounts denominated in different currencies.
Good to know
- Interest optimisation applies to accounts opened in the following European countries: Austria, Belgium, the Czech Republic, Denmark, France, Germany, Hungary, Ireland, Luxembourg, the Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland and the United Kingdom.
- Interest optimisation applies to the following currencies: AUD, CAD, CHF, CZK, DKK, EUR, GBP, HKD, HUF, JPY, MXN, NOK, NZD, PLN, RON, RUB, SEK, SGD, TRY and USD.
- Cash pooling is subject to processing costs.
- If one of the accounts is permitted to have a debit balance, it must have a credit line.
- You can combine Notional Cash Pooling and Physical Cash Pooling.