What is cash pool in SAP FIN-FSCM-CLM - Cash and Liquidity Management?

SAP Term: cash pool

• Component: FIN-FSCM-CLM

• Component Name: Cash and Liquidity Management

• Description: A dimension that aggregates the amounts of all the assigned bank accounts so as to provide an overview of the financial status in general for a certain group of bank accounts.

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• Key Concepts: 
  Cash pooling is a financial tool used by companies to manage their liquidity. It involves the centralization of cash balances from multiple accounts into one or more master accounts. This allows companies to optimize their cash flow and reduce their borrowing costs. 
  
  How to use it: 
  Cash pooling can be used to manage liquidity in a variety of ways. Companies can use it to consolidate their cash balances, transfer funds between accounts, and even borrow funds from one account to another. It also allows companies to take advantage of interest rate differentials between accounts. 
  
  Tips & Tricks: 
  When setting up a cash pool, it is important to consider the different types of accounts that will be included in the pool. Different types of accounts may have different restrictions or requirements, so it is important to understand these before setting up the pool. Additionally, it is important to consider the different currencies that will be included in the pool, as this can affect the cost of transactions and the availability of funds. 
  
  Related Information: 
  Cash pooling is a component of SAP's Financial Supply Chain Management (FSCM) Cash and Liquidity Management (CLM) module. This module provides companies with a comprehensive set of tools for managing their liquidity, including cash pooling, cash forecasting, and liquidity planning. Additionally, SAP's CLM module integrates with other SAP modules such as Treasury and Risk Management (TRM) and Financial Accounting (FI).