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.

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

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 cash pool’s closing balance for a day is calculated as a notional 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 paid out or charged to the concentration or lead 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 cash transfers performed by the bank.

Before creating Physical Cash Pools, you have to decide how the physical fund transfers will be recorded in the system. If you are using Oracle Treasure , you can choose to create fund transfers in Oracle Treasury or Oracle Cash Management by choosing one or the other in the site-level system profile option CE: Bank Account Transfers. If you are using Oracle Cash Management only, you will only be able to create fund transfers in Oracle Cash Management

For set up and configuration and more … refer Cash Management User Guide, chpater 8  :



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