Following is an example to explain the functions of cash concentration.
· At the end of each month you wish to transfer the amount exceeding a balance of USD 2,000 from two salary accounts (of a married couple, for example) to a third investment account.
¡ To do this you create a hierarchy with the investment account as root account and the two salary accounts as subordinate accounts. Enter a maximum balance of 2,000 for each of the subordinate accounts.
· On certain key dates you wish to completely transfer the balance of an account A to another account B.
¡ To do this you create a hierarchy with account B as root account and account A as subordinate account. Specify a maximum balance of 0 for the subordinate account A.
The carryforwards for cash concentration are as follows:
Account submitting |
Account receiving |
Transfer amount |
1101 |
1107 |
1,000 |
1100 |
1101 |
1,000 |
After cash concentration, these accounts show the following balances:
Account |
Balance |
1100 |
-500, |
1101 |
2,000 (= minimum balance) |
1107 |
2,000 (= minimum balance) |
1106 |
1,002 (> minimum balance due to minimum transfer amount) |