Accounting Tools

FEBRUARY 12, 2024

What is a Credit Sweep? A credit sweep is an arrangement between a business and its bank, where the bank automatically uses all excess funds in a deposit account to reduce the firm's outstanding line of credit.

Deposits 40

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Accounting Tools

SEPTEMBER 4, 2023

Earnings Credit The simplest investment option of all is to do nothing. Cash balances are left in the various bank accounts, where they accrue an earnings credit that is offset against the fees charged by the bank for use of the accounts. Related Articles Fundamental Analysis Investment Analysis Risk-Return Trade-Off

Corporate Finance 40

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Accounting Tools

SEPTEMBER 4, 2023

For example, looser credit results in a larger investment in accounts receivable , which consumes cash. This may involve the use of notional pooling or cash sweeps. Grant credit. Issue credit to customers, which involves management of the policy under which credit terms are granted. Credit rating agency relations.

Budgeting 40

Budgeting Accounts Receivable Accounts Receivable Account Receivables 40

Accounting Tools

SEPTEMBER 4, 2023

If a company uses multiple banks, it can instead employ a separate notional pooling arrangement with each bank, or a mix of notional pooling and cash sweeps. As was the case with cash sweeping, this means that some tax jurisdictions will want that interest income to be allocated back to the subsidiary level.

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Accounting Tools

OCTOBER 28, 2023

Notional pooling is a mechanism for calculating interest on the combined credit and debit balances of accounts that a corporate parent chooses to cluster together, without actually transferring any funds between the accounts. Related Articles Concentration Banking Physical Sweeping Zero Balance Account

Bank Reconciliation 40

Bank Reconciliation Tax Accounting Accounting 40