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T24 Cash Pooling

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 Learning Objectives
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Objectives

 Physical and Notional Pooling

 To setup Physical and Notional Pooling

 To create a Physical and a notional Pool

 Accounting entries

 Enquiries used for Physical and Notional

Pooling

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Cash Pool – Overview
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CASH POOLING

PHYSICAL POOLING NOTIONAL POOLING

To manage surplus cash Brings together the

better than earn interest balances without actually
Bring together the sweeping funds
balances in nominated Offers best interest leaving
accounts into a target the funds in the account.
account No transaction or FX
charges as no physical
movement

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Pooling Characteristics
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Physical Pooling Notional Pooling

 Improved Fund Mgmt  No movement of physical
balances
 Interco loans
 Optimizes interest payments
 Zero Balancing for a group

 Target Balancing  No tax implications

 Maybe local restrictions

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Physical Pooling

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Simple pool structure
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Master account

Subsidiary 1 Subsidiary 2 Subsidiary 3

No1 AC No1 AC No 1 AC

No 2 AC No 3 AC No 2 AC No 3 AC No 2 AC No 3 AC

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Dependencies
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CUSTOMER

Direct
LIMITS Pooling Demand
Accounts

GL

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Physical Pooling - Parameters
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AC.SWEEP.
TYPE

EB. AC.CP.
CONTRACT. GROUP.
BALANCES PARAM

PHYSICAL
POOLING
AC.ACCOUN
T.SWEEP.HIS AC.CASH.
T POOL

AC.CASH. INTRA.DAY.
POOL.LINK SWEEP

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Types of Pools
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ONLINE OR COB
From
Accounts

Maintenance To
Accounts

From
Accounts

Surplus To
Accounts
Corporate
Pooling
From
Accounts

Two way
To
Accounts

Overdraft Limits
From
Accounts

Cash flow
To
Accounts

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AC.SWEEP.TYPE
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 Account Pooling is a mechanism for creating automatic

payments across a number of Customer accounts during COB
or online , based on the account balance reaching a predefined
‘Trigger’ amount

 Different types of account Pools are defined here

 Id of AC.SWEEP.TYPE is alpha numeric. Can suggest type of

sweep

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AC.SWEEP.TYPE
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The field SWEEP.STYLE

is used to determine the
type of sweep

Different TRANSACTION
codes can be created for
the accounting entries as
required and are entered
in these fields.

Local routine to calculate

sweep amount

If set to Yes then the

amount swept during COB
will automatically be
returned to account during
the SOD

Routine to calculate sweep

amount

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AC.SWEEP.TYPE
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This field determines
whether LIMITS are used.

The fields
PRIORITISE.OD and
RESTRICT.SWEEP are
not used by the Pooling
module

The BALANCE.TO.USE
field determines which
account balance is to be
used for sweeping:
ONLINE ACTUAL
ONLINE CLEARED
WORKING BALANCE
AC.BALANCE.TYPE
WORKING BALANCE
LESS LOCKED AMOUNT
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AC.CP.GROUP.PARAM
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 Parameter Table to be set up for enabling Pool, Grouping is

done through this table

 A group can be defined as either a main group or a sub group,

sub group must be of the same currency as its main counterpart

 Groups can be established for sharing of balances,

Cash pooling and for both sharing and cash pooling

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AC.CP.GROUP.PARAM
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SUB.GROUP field can be set to
Yes or No

MAIN.GROUP.ID if the SUB.GROUP field

is Yes this field must contain the main
group id

The INTRA.DAY field controls if pools can

be run multiple times during the day

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AC.CP.GROUP.PARAM
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The SHARED.BALANCES field is

used to specify whether the balances
in the Cash Pool accounts are to be
grouped or not for overdraft checking

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AC.CP.GROUP.PARAM
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Sequencing can be manually setup

by a user or automatically created by
the system
The options for this field are
•ONLINE CLEARED
•ONLINE ACTUAL
•WORKING
•VALUE DATED
•AC.BALANCE.TYPE
•USER.DEFINED
•WORKING BALANCE LESS
LOCKED AMOUNT

If a locally defined balance is

required the local calculation routine
is specified here

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AC.CP.GROUP.PARAM
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Setting the
BACK.VALUE.ADJ field to
Yes will allow back value
dated adjustment entries to
be passed

The field BACK.VAL.CAP is

used to determine the
number of days back
valued adjustment entries
can be passed.

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AC.CP.GROUP.PARAM
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 In R13 PO module supports sweep between accounts of the same
currency only
 Error will be thrown, if the currency of the account defined in
AC.CASH.POOL record Id and the currency of the account defined in
LINK.ACCOUNT field are different.

 In R14 PO module supports execution of sweep between accounts of

different currency.
 System will use the appropriate exchange rate from the CURRENCY
table based on the value defined in the new field EXCH.RATE.TYPE of
AC.CP.GROUP.PARAM
 Rates can be either MID rate or BUY/SELL rate

 Exchange spread can be defined in the new field EXCH.RATE.SPR field

of AC.CP.GROUP.PARAM
 This spread will be defaulted in the new field EXCH.RATE.SPR of
AC.CASH.POOL record which can be amended by the user

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AC.CP.GROUP.PARAM
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 Market Exchange Profit for the spread amount will be calculated

and accounted into the PL category defined in
ACCOUNT.CLASS for a record Id called
‘POMKTEXCHPROFIT’ of ACCOUNT.CLASS

 Details of Exchange Rate, Spread, Market Exchange Profit, etc.

will be updated in AC.CASH.POOL.HIST record.

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Workshop 1
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 Create an AC.CP.GROUP.PARAM master record with the following

characteristics
 Balances are not shared
 Sequencing will be manual
 Use Working Balance

 Create two sub groups with the following characteristics

 Balances are not shared

 Sequencing will be manual
 Use Working Balance
 Rule Priority as frequency
 Intra day is multiple

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Workshop 1 - Solution
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Workshop 1 - Solution
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AC.CASH.POOL
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This field defines which group

the record belongs to

This field is used to define the

sub group that the pool belongs
to.

Specifies the sequence in

which this cash pool record will
be processed within the group.

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AC.CASH.POOL
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The LINK.ACCT contains the account with

which the source account has a sweep
relationship

The RULE field determines what type of

sweep will occur

Contains a standard frequency when the rule

will be run

MINIMUM.AMT holds the minimum account

balance required

MAXIMUM.AMT holds the maximum account

balance required

The UP.TO.AMOUNT field allows a cap on

the amount to be transferred.

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AC.CASH.POOL
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The fields CASHFLOW.AMT

and AGREGATE.BAL are used
together to determine the
amount of funds that can be
transferred down from a higher
level account

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AC.CASH.POOL
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An override amount or percentage can

be set using these fields

Local routine to calculate a pool amount

These fields are used to set a restriction

on small pools

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AC.CASH.POOL
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 It is possible to allocate sweep amount to different link accounts either

at a pre defined percentage or subject to a maximum amount for each
link account.
 A new field ALLOCATE.SWEEP.AMT is to be set to ‘Yes’ to enable
the feature of allocation of sweep

 User can also define a value in the multi value field called
UP.TO.AMOUNT
 When UP.TO.AMOUNT is defined the sweep amount allocation will be
in the ascending order of the multi value

 Sweep amount can also be allocated based on a predefined

percentage for each link account which can be defined in the new field
UP.TO.PERCENT
 Sum of the values in the field UP.TO. PERCENT must be 100%

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Back value entries
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 The BALANCE.TO.USE must be VALUE.DATED

 Adjustment entries are passed with back value date when transactions
are passed after sweeps with back value date

 For effecting Back value adjustments, accounts are classified into two
types

 Discretionary accounts and Non Discretionary accounts

 Discretionary accounts allow Banks to have any number of back value

adjustments
 Non Discretionary accounts can allow limited number of back value
adjustments in a month

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AC.CP.GROUP.PARAM
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 Example for back value adjustments

DATE Balance (USD) Pool Amount (USD)

01 JAN 20,000 10,000

02 JAN 17,000 7,000

03 JAN 7,000 0 (less than 10,000)

 On 4-Jan the following back value dated transactions are processed

 DR 123456 Value dated 01-Jan-2002 USD 5,000.00
 CR 123456 Value dated 01-Jan-2002 USD 20,000.00
 DR 123456 Value dated 02-Jan-2002 USD 5,000.00
 CR 123456 Value dated 03-Jan-2002 USD 4,000.00

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AC.CP.GROUP.PARAM
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 Based on the revised account Balance, the following entries will

be passed for Account 123456 with the respective value date

Value Date Old New Old Pool New Pool Adjustment

Balance Balance amount amount entry
01 JAN 20,000 35,000 10,000 25,000 -15,000

02 JAN 17,000 27,000 7,000 17,000 -10,000

03 JAN 7,000 21,000 0 11,000 -11,000

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Workshop 2
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 For one of the sub groups created in the previous workshop create a pool using 3
accounts, 2 of the accounts should pool their funds into the 3rd account. This top
account should pool into the master account from the master pool. You will need
to work out the sequencing for the accounts to pool correctly. Frequency should
be BSNSS for all records.
 1st account
Maximum AC balance 1000

 2nd account
 Maximum AC balance 2500
 Minimum transfer 50

 3rd account (top account)

 Account balance should be zero
 Minimum transfer 20

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Workshop 2 - Solution
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Workshop 2 - Solution
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AC.CASHPOOL.LINK
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INTRA.DAY.SWEEP
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INTRA.DAY.SWEEP
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 Charges are collected at the time of sweep execution. If the account
has insufficient balances to cover the charges the account is
overdrawn
 To avoid overdrawing in the account the charge amount can be
pushed to transaction recycler which retries at predefined frequency

 Transaction Recycler is linked to the debit account then the charge

amount is pushed to transaction recycler and the account is not
overdrawn

 If Transaction Recycler is enabled for PO module but the debit account

is not linked, then charge amount is debited to an internal suspense
account

 AC.CP.SWEEP.CHARGE services must be run to collect the sweep

charges online when INTRA.DAY.SWEEP is triggered. Otherwise the
charge details are written to a work file (AC.CP.CHARGE.LIST ) and
processed during COB

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Workshop 3
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 Check AC.CASH.POOL.LINK records created for your AC.CASH.POOL

records

 Fund your accounts form one of the sub groups you created earlier

 Check the EB.CONTRACT.BALANCES records for your accounts

 Create and verify a record for your sub group on the

INTRA.DAY.SWEEP application.

 Check the EB.CONTRACT.BALANCES application for the accounts in

the sub group.

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Workshop 3 - Solution
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Workshop 3 - Solution
Before the 40
INTRA.DAY.SWEEP
record is authorised

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Workshop 3 - Solution
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Workshop 3 - Solution
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Workshop 3 - Solution
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Workshop 3 - Solution
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Workshop 3 - Solution
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Workshop 3 - Solution
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Workshop 3 - Solution
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AC.ACCOUNT.SWEEP.HIST
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Workshop 4
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 Look at the AC.ACCOUNT.SWEEP.HIST records created by

workshop 3

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Workshop 4 - Solution
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Workshop 4 - Solution
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Workshop 5
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Consolidation workshop

Use User Menu > Retail Operations > Account> Account Enquiries
Choose five accounts with Positive balances.

Use User Menu > Corporate Operations > Cash Management >
Transactional Pooling > Cash Pool Group Functions > Create simple
group
Create a Group SWEEPGROUP with a main account from the chosen
list of accounts and authorise the group created

Use User Menu > Corporate Operations > Cash Management >
Transactional Pooling > Cash Pool Group Functions > Create sub
group and link to main group
Create a Group SUBGROUP with another main account and main
group as SWEEPGROUP from the chosen list of accounts and
authorise the group created
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Workshop 5 - Solution
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1
2

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Workshop 6
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Consolidation workshop

Use User Menu > Corporate Operations > Cash Management >
Transactional Pooling > Cash Pool Sweep functions > Create cash pool

 For one of the accounts from the list, create a cash pool with
maintenance sweep with the link account as different account under
group SWEEPGROUP

 For another of the accounts from the list, create a cash pool with
TWOWAY sweep with the link account as master account under group
SWEEPGROUP

 For the last account from the list, create a cash pool with SURPLUS
sweep with the link account as master account under group
SUBGROUP

 Authorise the records

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Workshop 6 - Solution
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Workshop 7
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Consolidation workshop

Use User Menu > Corporate Operations > Cash Management >
Transactional Pooling > Sweep Processes > Run sweeps intra day

 Run intra day sweep for the Cash pool group SWEEPGROUP

 View the balances of the accounts through the account enquiry

Use User Menu > Corporate Operations > Cash Management >
Transactional Pooling > Enquiries

 View the Cash Pool Links List

 View the Group Position
 And the Sweep movements
For the SWEEPGROUP

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Workshop 7 - Solution
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Workshop 7 - Solution
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Other Features of Cash Pool
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 Pools can be reversed using Application REV.GROUP.CP

 Used to reverse accounts swept during previous close of

business

 This does not work with intra day sweep

 Pools reversed can be rerun. This process helps to make

changes back value transactions

 Can be rerun only once, rerun is applicable for previous

working day’s pool

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 Other
Other Features
Features of Cash
of Cash Pool Pool
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 Cash pooling module is enabled to send outward transfers

including SWIFT messages as target accounts may reside
outside the country/ outside T24 bank. T24 creates FT for
outward payments or accept an incoming MT101 or MT940 and
moves the balances accordingly when participating accounts
reside in other banks.

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Notional Pooling

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Introduction of ICA HIERARCHY
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 Accounts can be linked into a hierarchical structure of individual groups

 A hierarchy has a main account in a Notional Pool Hierarchy to which

sub accounts account are linked.

 At any one time an account can be a member of a maximum of two

Notional Pool groups - sub account in one group can be main account
of another.

 Accounts in a hierarchy must be of the same currency or currency

group

 Purpose of Hierarchy Group formation is for the distribution of interest.

Taxes and charges not applicable

 ICA group interest is not accrued it is calculated and posted at the time
the main account in a group is capitalised
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Simple hierarchy example
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Normal Main account Main account ICA

interest Balance 1,000,000 Balance 1,700,000
earned Rate 5% Rate 5%

Sub account Group Sub account

Balance 500,000 difference is Balance 200,000
Rate 2% calculated Rate 2%

Normal Normal
Interest Interest
earned earned

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Parameters
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ICA.
HIERARCHY.
PARAMETER
ACCOUNT. ICA.
CLASS
HIERARCHY

STMT.ACCT. ACCOUNT
XX

NOTIONAL
POOLING
ACCT.
ACTIVITY ICA.GROUP.
HISTORY

EB.
CONTRACT.
ICA.GROUP.
BALANCES
DETAIL
ICA.GROUP.
DISTRIBUTION

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Notional Pooling Setup
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Notional Pooling Setup

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ACCOUNT.CLASS
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ICA.HIERARCHY.PARAMETER
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The ID to the file is a COMPANY
code

These fields are available for

each type of interest posting
• DR
• DR2
• CR
• CR2

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ICA.HIERARCHY
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Defines the top level

account of the group

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Workshop 8
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 Check that the ACCOUNT.CLASS records ICASUSPCR and

ICASUSPDR records are present in the system. If not input and
authorise these records

 Check the ICA.HIERARCHY.PARAMETER record is present in

the system. If not input and authorise this record.

 Select a customer account from the system and create an

ICA.HIERARCHY record for it

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Workshop 8 - Solution
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ACCOUNT
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If set to yes this account is a main

account

These fields are used to enter a new

hierarchy link or remove it.

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ACCOUNT
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This field is only used when

the ICA.DISTRIB.TYPE is
set to RATIO

This field specifies the type of

interest distribution in the group

This field specifies if interest is

calculated

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ICA Distribution Methods
ICA Group Difference
Distribution
RATIO
Percentage of group interest
defined in ICA.DISTRIB.RATIO
for the sub account is allocated
to the sub account
Group Difference * Ratio / 100
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INTEREST
Interest earned by the sub
account is used to determine
the interest allocated to the sub
account
Group Difference * (Interest
earned by sub account /
Interest earned by all accounts)
Example hierarchy set up
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Customer 111508 Frozen

Foods

Top ac 51047

Sub account 51055 Sub Account 51063

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Example set up
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Example
51063 76
51055

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ICA.GROUP.DETAIL
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Workshop 9
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 Create a master account which will post interest and the interest is
distributed using the ratio method. Authorise the record

 Create a sub account for this hierarchy which will post interest using
the ration method and receive 25% of the interest. Authorise the record

 Create a sub account for this hierarchy which will post interest using
the ratio method and receive 30% of the interest. Authorise the record

 Check the ICA.GROUP.DETAIL record created for your notional pool

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Workshop 9 - Solution
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Workshop 9 - Solution
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Example Interest calculation
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Account Balance Interest rate Normal

Interest
51047 10,000,000 6% 26,666.67
51055 2,500,000 2% 2,222.22
51063 6,000,000 2% 5,333.33
Total Normal Interest 34,222.22

ICA AC ICA Group Interest rate Group

Balance Interest
51047 18,000,000 6% 49,333.33

Group Normal Group

Interest Interest Difference
49,333.33 34,222.22 15,111.11
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Example interest postings
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Example interest postings
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Example accounting entries
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Example ICA.GROUP.DETAIL
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ACCT.ACTIVITY
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STMT.ACCT.CR
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STMT.ACCT.CR
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ICA.GROUP.DISTRIBUTION
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Workshop 10
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 Use T24 Account > Open Current Account

Create four Current accounts for your customer and authorise the records

 Use T24 Corporate Operations > Cash Management > Create Notional
Pool Main Account
From the accounts created already Create a main account with Ratio type
and main account indicator as YES. Interest posting option is YES.
Update the effective date as today.

 Use ICA.HIERARCHY and set up the account as Top account . Verify the
details in ICA.TOP.ACCOUNT

 Use T24 Corporate Operations > Cash Management > Create Notional
Pool Main Account
Edit the record top account and update the main account number as top
account number . Get the record authorised.

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Workshop 10
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 Use T24 Corporate Operations > Cash Management > Create Notional
Pool Sub Account
Use accounts created earlier and created sub accounts under top
account with Interest posting option as yes, Start date current date and
distribution ratio accordingly .

 Use ICA.GROUP.DETAIL to Verify the hierarchy created.

 Setup Account level interest condition for Credit frequency date using
ACI and verify the GROUP.CAPITALISATION for daily frequency.

 Perform FT to get your accounts to positive balance

The notional pooling setup is ready now. Upon running cob, you can
view the ICA.GROUP.HISTORY

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Workshop 10 - Solution
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Workshop 10 - Solution
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Quiz
• When a balance in an Account goes beyond a desired amount, 94

the excess can be swept to another account so that the first

account maintains only the desired balance. What type of
Sweep is this?

Ans: Surplus Sweep

• An account is having $50,000 and a limit of $60,000 is attached

to that. There is no minimum balance requirement. What is the
maximum amount that can be swept from this account to
maintain a balance in another account when USE.LIMITS is
NO?

Ans: In cashpool, as USE.LIMIT is set to NO, overdraft is

allowed irrespective of the limit amount. When USE.LIMITS
is set to yes overdraft is upto the sanctioned limit amount

• What is the effect of SCHEDULE Field being Blank in

AC.CASH.POOL record?

Ans: Sweep can be effected online through

INTRA.DAY.SWEEP application. If not run, it will get
effected during COB
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Quiz
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 How do you facilitate sweeps to be done number of times in a
day?

Ans: In AC.CP.GROUP.PARAM record, INTRA.DAY field

should be given value as Multiple so that sweeps can be
done number of times.

 What is the effect of FREQUENCY Field being PRIORITY in

AC.CP.GROUP.PARAM?

Ans: User can prescribe their own priority when multiple

links are created for sweeps in a group

 Can a shared group of accounts without sweep have

transactions intraday or online?

Ans: No it can be only during COB with their own sub

group accounts.
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 What Did We Learn?
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Conclusion

 We have so far seen

 Business need of this module

 Parameter table to be set up

 Sweep and Cash pool Types

 Sweep and cash pool Operations

 Application features

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