What is effective cash pooling in SAP FS-MCM-ECP - Effective Cash Pooling?

SAP Term: effective cash pooling

• Component: FS-MCM-ECP

• Component Name: Effective Cash Pooling

• Description: A function in the master contract for the optimization of interest and liquidity management for business partners who have multiple accounts at a bank, for example, enterprise groups. The accounts that take part in the effective cash pooling are represented in the contract relationships of the master contract as a hierarchy with a main account and additional participant accounts. The effective cash pooling is executed based on fixed methods, and on rules and restrictions defined in Customizing.

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• Key Concepts: 
  Effective cash pooling is a feature of the SAP Financial Services – Multi-Company Management (FS-MCM) component that allows companies to manage their cash more efficiently. It enables companies to pool their cash resources and use them in a more efficient way, allowing them to reduce costs and increase liquidity. 
  
  How to use it: 
  The FS-MCM-ECP component provides a range of features that allow companies to manage their cash more effectively. These include the ability to set up and manage multiple cash pools, monitor cash flows, and transfer funds between pools. It also provides reporting capabilities that allow companies to track their cash flows and make informed decisions about how to best use their resources. 
  
  Tips & Tricks: 
  When setting up effective cash pooling, it is important to ensure that all of the necessary information is entered correctly. This includes setting up the correct accounts for each pool, setting up the correct transfer rules, and ensuring that all of the necessary reports are generated. Additionally, it is important to regularly review the performance of the pools and make any necessary adjustments. 
  
  Related Information: 
  For more information on effective cash pooling, please refer to the SAP Help Portal or contact your local SAP representative. Additionally, there are a number of online resources available that provide detailed information on how to set up and use effective cash pooling in SAP.