What is cash pooling? Putting a group's cash to work in one place
By SendPay Business · · 2 min read
Cash pooling is a way for a group of related companies to manage their bank balances together. Instead of one company sitting on spare cash while another pays for an overdraft, the balances are combined or offset.
Two main types
- Physical pooling: money is actually moved into one main account, often at the end of each day. This is sometimes called zero balancing.
- Notional pooling: money stays in each account, but the bank works out interest as if the balances were combined.
Why groups use it
It gives a clearer view of the group's total cash, cuts the need for overdrafts, and can reduce interest costs. Groups trading in several currencies often pool each currency separately and manage the gaps centrally.
What to check first
- Moving cash between companies can create intercompany loans, which may have tax effects.
- Some countries restrict how money can move across borders.
- Directors of each company still have duties to their own company.
- Not every bank offers notional pooling in every country.
Where SendPay fits
SendPay isn't a bank. SendPay platforms give your customers GBP, EUR and USD accounts, transfers and branded Visa cards under your own brand, powered by licensed partners. SendPay doesn't offer lending.
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Build my platform →Questions people ask
How much could pooling balances save?
Compare separate and pooled interest with the free calculator.
Cash pooling calculator →What is treasury management?
How a business manages its cash, funding and financial risk.
Treasury management →What is a multi-currency account?
One account that holds and pays in several currencies.
Multi-currency accounts →What is payment reconciliation?
Matching payments received against invoices and bank records.
Reconciliation →Read next
This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. PayPal, Patreon and Substack are named as reference points only and are not affiliated with SendPay Business.