Cash Pools (Oracle Cash Management)

Cash Pools

Cash Pooling is a cash management technique aimed at optimizing the balances of the internal bank accounts held at one or several banks. It is usually performed on a daily basis and can be done by transaction or by total net end-of-day balances.

To perform cash pooling, you need to define a cash pool and assign internal bank accounts setup in Oracle Treasury to the cash pool.

Creating Cash Pools

A cash pool is a group of bank accounts with one or more concentration accounts and multiple sub accounts. You can create the following two types of cash pools:

Notional Cash Pool. A cash pool consisting of one concentration account and multiple sub accounts. This type of cash pool is used for cash leveling similar to zero balancing without the actual funds movement. The closing balance for a day is calculated as a sum of the individual balances of the bank accounts included in the pool. The interest is calculated on the notional net balance of all accounts included in the pool and then applied to the single concentration account.
Physical Cash Pool. A cash pool consisting of one or two concentration accounts and multiple sub-accounts with funds transfer rules specified for each combination of concentration accounts and sub accounts. This type of cash pool is used for cash leveling wherein the user can initiate fund transfers or mirror outsourced cash pools.

To create a notional cash pool:

Navigate to the Cash Pools Search and Results page.
Select Notional Cash Pool.
Select Go.
In the Create Notional Cash Pool Header Information page, enter a unique Cash Pool name.
Select a concentration account for your cash pool. The account number, bank name, company, and cash pool currency default in based on the selected bank account.

Note: You can only select bank accounts that you have access to, that have not been assigned to other cash pools, and for which the Interest Rounding and Interest Includes options have been assigned in Oracle Treasury.
In the Effective Date From field, enter the first date that the notional cash pool is active, such as the first date the consolidated bank account balances will be displayed in the Bank Balances window or the first date the interest will be calculated on the consolidated balance.
In the Effective Date To field, enter the last date that the notional cash pool is active.
Click Next to assign sub accounts.
In the Create Notional Cash Pool: Sub Accounts page, select bank accounts to include as sub accounts for your cash pool.
In the Create Notional Cash Pool: Review page, review the information you have entered.
Click Finish to save the cash pool.

To create a physical cash pool:

Navigate to the Cash Pools Search and Results page.
Select Physical Cash Pool.
Select Go.
In the Create Physical Cash Pool Header Information page, enter a unique name for your cash pool.
In the Concentration Type field, select either One Account or Two Accounts to indicate if the cash pool will have one or two concentration accounts.

If you select the One Account option, the Concentration Account field is displayed.
1. Select a Concentration Account. The Account Number, Bank Name, Company, and Cash Pool Currency default in.
If you select the Two Accounts option, the Investment Concentration Account field and the Funding Concentration Account field is displayed.

Select an Investment Concentration Account and a Funding Concentration Account for the cash pool. The Account Number, Bank Name, Company and Cash Pool Currency default is based on the selected bank accounts. Both the investment and funding concentration accounts should belong to the same company.
In the Effective Date From field, enter the first date that the physical cash pool is active, such as the first date the cash leveling transactions can be created.
In the Effective Date To field, enter the last date that the physical cash` pool is active.
In the Bank Initiated Sweeps field, select Yes if your bank initiates the cash leveling transactions. Select No if you want to use this cash pool to create transactions in Oracle Treasury and send payment instructions to the bank.
Select Next to assign sub accounts.
In the Create Physical Cash Pool: Sub Accounts page, select bank accounts to include as subaccounts in the cash pool.
Select Next.
In the Create Physical Cash Pool: Target Balances page, define target balances and transfer amount calculation rules for each sub account . If target balances for sub accounts included in the cash pool have already been defined in Oracle Treasury, they will default here.
Select Next.
In the Create Cash Pool: Treasury Deal Attributes page, select the attributes that are required for creating transactions in Oracle Treasury during cash leveling. For company-initiated transfers, or during sweep transaction generation for bank initiated sweeps. For more information, see: Reconciling Sweep Transactions.
Select Next.
In the Create Physical Cash Pool: Review page, review the information you have entered.

Create (Notional/Physical) Cash Pool: Header Information Page Reference

Cash Pool Name. The name of the cash pool.

Concentration Type. (Physical Cash Pool only) The concentration type that determines whether the cash pool will have one or two concentration accounts. The following two options are available: One Account or Two Accounts.

Concentration Account. The concentration bank account for the cash pool.

Investment Concentration Account. (Physical Cash Pool only) The concentration account used for transferring surplus funds from subaccounts.

Funding Concentration Account. (Physical Cash Pool only) The concentration account used for transferring surplus funds to subaccounts to cover the deficit or maintain target balances.

Account Number. The account number corresponding to the selected concentration accounts.

Bank Name. The bank name corresponding to the selected concentration account.

Company. The name of the company corresponding to the concentration accounts.

Cash Pool Currency. The currency of the selected concentration account. In case the physical cash pool has two concentration accounts, then both the concentration accounts must have the same currency.

Effective Date From. The first date that the cash pool is active.

In notional cash pool, this is the first date the consolidated bank account balances will be displayed in Bank Balances window and the first date the interest will be calculated on the consolidated balance. If this value is left null, all available balances prior to the Effective Date To will be consolidated.
In physical cash pool, this is the first date that the cash leveling or ZBA transactions can be created.

Effective Date To. The last date that the cash pool is active.

In notional cash pools, this is the last date the consolidated bank account balances will be displayed in the Bank Balances form and the last date the interest will be calculated on the consolidated balance. If this value is left null, all available balances after the Effective Date From will be consolidated.
In physical cash pools, this is the last date that the cash leveling/ZBA transactions can be created.

Bank Initiated Sweeps. (Physical Cash Pool only) This choice list indicates whether the cash leveling transfers are initiated by the bank or not.

If Yes is selected, the cash pools will not be generating transactions based on the cash position results. Instead, transactions will be generated when the bank statement is imported and the Sweep Transactions Generation program is run.
If No is selected, the cash pools can be used to initiate cash leveling transactions in the system and send the payment instructions to the bank.

Create (Notional/Physical) Cash Pool: Sub Accounts Page Reference

Cash Pool Currency. The currency of the concentration account of the cash pool.

Name. The bank account name.

Type. The type of the sub account. The type can be Account.

Account Number. The account number for the bank account.

Bank. The bank corresponding to the bank account number(s) shown in the Account Number column.

Company/Subsidiary. The company or subsidiary corresponding to the account number(s) displayed in the Account Number column.

Create Physical Cash Pool: Target Balances Page Reference

Cash Pool Currency. The currency of the concentration account of the cash pool.

Concentration Account. The cash pool concentration account.

Name. The bank account name.

Minimum Target Balance. The minimum target balance of the bank account used to determine the projected fund deficit during cash positioning. If the minimum target balance has been entered for the bank account in Oracle Treasury it is displayed in this field. You can overwrite the default value.

Maximum Target Balance. The maximum target balance of the bank account used to determine the projected fund surplus during cash positioning. If the maximum target balance has been entered for the bank account in Oracle Treasury it is displayed in this field. You can overwrite the default value.

Minimum Payment Amount. The minimum payment amount used to determine if and how much of the projected fund surplus is transferred to the concentration account during cash leveling.

Minimum Receipt Amount. The minimum receipt amount used to determine if and how much of the projected fund deficit is transferred from the concentration account during cash leveling.

Rounding Factor. A funds transfer rule used to determine how to round amounts when calculating the projected fund surplus or deficit for transfer to or from the concentration account during cash leveling. The default is Unit.

Rounding Rule. A funds transfer rule used to determine how to round amounts when calculating the projected fund surplus or deficit for transfer to or from the concentration account during cash leveling. The options are: Nearest, Round Down and Round Up. The default is Nearest.

Create Physical Cash Pool: Treasury Deal Attributes

Inter-Account Transfers Region

Portfolio. Default portfolio of the company of the concentration account. The list displays all non-external portfolios belonging to the company.
Product Type. The product type authorized for Inter-Account Transfers in Oracle Treasury.

Intercompany Funding Region: Company Attributes

Company. The company of the concentration account.
Portfolio. Default portfolio of the company of the concentration account. The list displays all non-external portfolios belonging to the company.
Product Type. The product types for Intercompany Funding deal type.

Intercompany Attributes

Intercompany Party. The name of the company or subsidiary to which the sub accounts included in the cash pool belong.
(Company Details) Funding Limit. The authorized funding and foreign exchange type limit for the company of the concentration account(s). This is used for determining the rules for creating intercompany transactions in Oracle Treasury for transfers between the concentration account and the sub account when they belong to different companies.
(Company Details) Investment Limit. The authorized investment and foreign exchange type limit for the company of the concentration account(s). This is used for determining the rules for creating intercompany transactions in Oracle Treasury for transfers between the concentration account and the sub account when they belong to different companies.
(Intercompany Party Details) Portfolio. A list of all non-external portfolios belonging to the company displayed in the Company field in the table row. This field is disabled for all subsidiaries included in the cash pool. If no default portfolio is defined in Oracle treasury, then this field does not display a value.
(Intercompany Party Details) Product Type. The product type authorized for Intercompany Funding transactions for the company displayed in the Company field of the table. This field is disabled for all subsidiaries included in the cash pool.
(Intercompany Party Details) Funding Limit. The authorized funding and foreign exchange type limit for the company displayed in the Company field of the table. This is used for determining the rules for creating intercompany transactions in Oracle Treasury for transfers between the concentration account and the sub account when they belong to different companies. This field is disabled for all subsidiaries in the cash pool.
(Intercompany Party Details) Investment Limit. The authorized investment and foreign exchange type limit for the company displayed in the Company field of the table. This is used for determining the rules for creating intercompany transactions in Oracle Treasury for transfers between the concentration account and the sub account when they belong to different companies. This field is disabled for all subsidiaries in the cash pool.
(Intercompany Party Details) Pricing Model. The authorized pricing model for Intercompany Funding deal type. This field is disabled for all subsidiaries in the cash pool. The default value is No Revaluation.
Interest Rounding. The default value for rounding of interest amount as set up in the company profile in Oracle Treasury. The default is Nearest. The following options are available: Nearest, Round Down, and Round Up.
Interest Includes. The default value for calculation of interest amount as set up in the company profile in Oracle Treasury. The default is Last Day. The following options are available: Last Day, First Day, and Both Days.
Company Pricing Model. The authorized pricing model for Intercompany Funding deal type. The default value is No Revaluation.

Note: For additional information, please refer to the Oracle Treasury User Guide.

Viewing and Updating Cash Pools

You can view cash pool information by searching for the cash pool name and clicking on the cash pool name in the Search and Results page. If you have the appropriate user security, you can update the cash pool.

Notional Cash Pool Error and Warning Messages

Exception	Type: E=Error W=Warning	Message
Cash Pool Name is not unique.	E	Cash Pool Name - This Cash Pool Name already exists. Please enter a unique Cash Pool Name.
Cash Pool Name is null.	E	Cash Pool Name - Cash Pool Name cannot be null. Please enter a Cash Pool Name.
Concentration Account is null.	E	Concentration Account - Concentration Account cannot be null. Please enter a Concentration Account or select one from the list of values.
Effective Date From is later than Effective Date To.	E	Effective Date From - The Effective Date from must be earlier than Effective Date To. Please revise at least one of these dates.
Effective Date From is not valid.	E	Effective Date From - Incorrect date format. Please enter the date in DD-MMM-YYYY format.
Effective Date To is not valid.	E	Effective Date To -Incorrect date format. Please enter the date in DD-MMM-YYYY format.
Cash Pool Currency has been changed after at least one Sub Account has been selected.	W	Changing Cash Pool Currency will remove all previously selected Sub Accounts. Would you like to continue? Click Yes to remove all previously selected Sub Accounts. Click No to restore the Cash Pool Currency and keep all previously selected Sub Accounts.

Physical Cash Pool: Header Information Error and Warning Messages

Exception	Type: E=Error W=Warning	Message
Cash Pool Name is not unique.	E	Cash Pool Name - This Cash Pool Name already exists. Please enter a unique Cash Pool Name.
Cash Pool Name is null.	E	Cash Pool Name - Cash Pool Name cannot be null. Please enter a Cash Pool Name.
Concentration Account is null when Concentration Type = Single Concentration Account.	E	Concentration Account - Concentration Account cannot be null. Please enter a Concentration Account or select one from the list of values.
Investment Concentration Account is null when Concentration Type = Two Concentration Accounts.	E	Investment Concentration Account - Investment Concentration Account cannot be null. Please enter an Investment Concentration Account or select one from the list of values.
Funding Concentration Account is null when Concentration Type = Two Concentration Accounts.	E	Funding Concentration Account - Funding Concentration Account cannot be null. Please enter a Funding Concentration Account or select one from the list of values.
Effective Date From is later than Effective Date To.	E	Effective Date From -The Effective Date from must be earlier than Effective Date To. Please revise at least one of these dates.
Effective Date From is not valid.	E	Effective Date From - Incorrect date format. Please enter the date in DD-MMM-YYYY format
Effective Date To is not valid.	E	Effective Date To - Incorrect date format. Please enter the date in DD-MMM-YYYY format
Cash Pool Currency has been changed (by changing the concentration account) after at least one Sub Account has been selected.	W	Rather than displaying a message, the user will be taken to the Warning-Change-Currency Page.
Concentration Account or Investment/Funding Concentration Accounts have been changed to accounts belonging to a different company than before, after subsidiary bank accounts or Company Attributes have been selected for the original company on the Create-Physical- Sub, Create- Physical-Company- Attributes and Create-Physical- Intercompany- Attributes page.	W	You have changed the Concentration account to a bank account belonging to a different Company. All previously selected Subsidiary Bank Accounts and Company properties will be removed. Would you like to continue? Click Yes to remove all previously selected Subsidiary Bank Accounts and Company properties. Click No to restore the Concentration Account and keep all previously selected Company properties.

Physical Cash Pool: Target Balances Error Messages

Exception	Type: E=Error W=Warning	Message
Minimum Payment Amount is negative.	E	Minimum Payment Amount - Minimum Payment Amount cannot be a negative number. Please enter a positive number.
Minimum Receipt Amount is negative.	E	Minimum Receipt Amount - Minimum Receipt Amount cannot be a negative number. Please enter a positive number.
Minimum Target Balance is not a numeric value or the number of decimals exceeds the currency precision.	E	Minimum Target Balance - Minimum Target Balance cannot be non-numeric or have more decimals than defined for the Cash Pool Currency. Please enter a numeric value with a number of decimals not exceeding the Cash Pool Currency precision.
Maximum Target Balance is not a numeric value or the number of decimals exceeds the currency precision.	E	Maximum Target Balance - Maximum Target Balance cannot be non-numeric or have more decimals than defined for the Cash Pool Currency. Please enter a numeric value with a number of decimals not exceeding the Cash Pool Currency precision.
Minimum Target Balance is greater than Maximum Target Balance.	E	Maximum Target Balance - Maximum Target Balance cannot be less than Minimum Target Balance. Please revise at least one of these Target Balances.
Minimum Payment Amount is not a numeric value or the number of decimals exceeds the currency precision.	E	Minimum Payment Amount - Minimum Payment Amount cannot be non-numeric or have more decimals than defined for the Cash Pool Currency. Please enter a numeric value with a number of decimals not exceeding the Cash Pool Currency precision.
Minimum Receipt Amount is not a numeric value or the number of decimals exceeds the currency precision.	E	Minimum Receipt Amount - Minimum Receipt Amount cannot be non-numeric or have more decimals than defined for the Cash Pool Currency. Please enter a numeric value with a number of decimals not exceeding the Cash Pool Currency precision.

Physical Cash Pool: Treasury Deal Attributes and Review Error Messages

Exception	Type: E=Error W=Warning	Message
Inter-Account Transfers Portfolio is null (when Inter Account Transfer section is not hidden) and/or Intercompany Funding Portfolio is null (when Intercompany section is visible) and/or Intercompany Attributes Portfolio is null (when Intercompany section is visible).	E	Portfolio - Portfolio cannot be null. Please enter a Portfolio or select one from the list of values.
Inter-Account Transfers Product Type is null (when Inter Account Transfer section is not hidden) and/or Intercompany Funding Product Type is null (when Intercompany section is visible) and/or Intercompany Attributes Product Type is null (when Intercompany section is visible).	E	Product Type - Product Type cannot be null. Please enter a Product Type Currency or select one from the list of values.
Intercompany Funding Company Pricing Model is null (when Intercompany section is visible) and/or Intercompany Attributes Pricing Model is null (when Intercompany section is visible).	E	Pricing Model - Pricing Model cannot be null. Please authorize at least one Pricing Model for the Intercompany Funding deal type and select one from the list of values.
A bank account that has been selected as a Concentration Account in this cash pool has already been assigned to another cash pool.	W	Concentration Account - This bank account has already been assigned to another cash pool: [Cash Pool Name]. Please select another bank account. Investment Concentration Account - This bank account has already been assigned to another cash pool: [Cash Pool Name]. Please select another bank account. Funding Concentration Account - This bank account has already been assigned to another cash pool: [Cash Pool Name]. Please select another bank account.
A bank account that has been selected as a Sub Account in the current cash pool has already been assigned to another cash pool.	W	You can only assign the same Sub Account to one cash pool. Would you like to remove the Sub Accounts that have already been assigned to other cash pools and save your work? Click Yes to remove all Sub Accounts that have already been assigned to other cash pools and save your work. Click No to return to the cash pool setup and change the Sub Account selection manually.