Cash Concentration
Cash concentration means that payment orders are generated either to be credited to or debited to accounts within an account hierarchy you have created. You can, for example, define that an account must always have a certain minimum balance or that the remaining balance on an account is always to be transferred to another account (for example, an investment account) at the end of every month.
Example for the creation of a cash concentration hierarchy:
At the end of each month you want to transfer the amount exceeding a balance of USD 2,000 from two salary accounts (of a married couple, for example,) to a third account. This third account serves as joint 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 USD 2,000 for each of the subordinate accounts.
Note
Cash concentration with external root accounts does not support SEPA credit transfers and SEPA direct debits.
Prerequisites
Cash concentration is based on a tree structure that you use to define the hierarchy of the participating accounts. You must create this hierarchy with a special hierarchy type for cash concentration.
On this subject, see:
Scope of Functions
When you use the hierarchy type for cash concentration, you can clear or fill account balances. To do this, in the hierarchy you define the required data for:
The minimum balance to which an account is filled.
The maximum balance, amounts above which are transferred to a superior account.
A trivial amount limit for the transfer of funds.
When you clear the accounts, you have the following options:
You can transfer the turnovers of an account by value date to a superior account, separated into debit and credit.
An account is filled to reach a minimum balance. The amounts needed for this are transferred from the superior account. Amounts of subordinate accounts already transferred are taken into consideration.
Amounts that exceed a specified maximum amount are transferred to the superior account.
You can specify a trivial amount (minimum transfer amount) for a transfer to a superior account above which the transfer takes place.
Before transfer, the amounts can be rounded off. You decide on the point above which amounts are rounded off.
If required, can define a maximum and minimum balance specifically for each cash concentration.
You can simulate the clearing of the accounts.
You can choose from the following types of carryforward:
Value date exact
If you choose value date exact, every item is transferred with the exact value date with which it was posted to the account. This means you can clear all accounts below the root account to a value date-based balance of zero.
By posting date-based account balance
If you choose posting date-based account balance, the carry forwards are based on the current posting balance.
By value date-based account balance
If you choose value date-based account balance, the carry forwards are based on the value date balance. It is also possible to restrict up until which value date the turnovers are included.
Split credit/debit value date dependent
If you choose Split credit/debit value date dependent, the turnovers per value date amount are transferred separately as the total of all debit postings and the total of all credit postings for this day.
A base amount that is to remain on an account is first created by a corresponding posting during the first cash concentration run of this type. This base amount is changeable and can be set during the next cash concentration run of the assigned hierarchy by an adjustment posting on the account.
Note
In the Implementation Guide (IMG), you can restrict the above-mentioned selection by choosing 
Master Data
Account
Maintain Account Relationship Types
Set Type of Cash Concentration Carryforward
.
When you start a single run, you can define individual amounts that overwrite the settings from the account hierarchy for this run.