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IC Activity - Fundamentals

What It Is (General)

Intercompany (IC) activity refers to financial transactions between entities within the same corporate group. This includes cash pooling (automatic or manual concentration of funds), intercompany loans, dividend distributions, royalty payments, and settlement of internal invoices.

What It Means for Our ICP

How Treasury Teams Think About It

Cash pooling is the primary IC activity treasury teams manage: - Master account - The central account that provides/receives funding (e.g., on AG) - Participant accounts - Subsidiary accounts that are swept to/from master - Automatic sweeps - System moves money to maintain target balances - Manual funding - Treasury-initiated transfers based on needs

Key distinction: Automatic sweeps vs intentional payments

"It would be good if the system can differentiate if this is a payment which we instructed, an invoice payment or intercompany payment, or if it is an automatic cash pooling" - Yulia (ON)

Intercompany vs Intra-Company

Important distinction that affects reporting and analysis: - Intercompany: Flows between different legal entities (e.g., On AG → On France) - Intra-company: ZBA/book transfers within same entity (e.g., between accounts at same legal entity)

These need different treatment for categorization and reporting purposes. True intercompany flows affect IC balances and may have transfer pricing implications, while intra-company transfers are internal treasury operations.

"This is like actually the movement from the Participant to the Master within the same [entity]... So this is on AG, and it's all on AG. So it's all inside on AG." - Amanda Mitt, On (2024-10-31)

Lucia's perspective: "I would want to see every single category categorized. I still would argue that this is intercompany cash pooling. And I think it's just depending on the purpose of your report, you can filter this out."

IC Transaction Volume Patterns

From Palm Internal (2026-02-02): - ZBAs = highest volume - Most IC transactions are automatic ZBA sweeps - Non-ZBA IC = low volume - Typically 1-2 transactions per account per month - Cost plus settlements - Large amounts ($5-20M/month), but infrequent; kicked off by AP, not treasury

"The highest volume will be ZBAs. For sure. By a lot." - Gurjit

Cost Plus Invoice Settlements

A distinct category of IC activity that's high-value but treasury has limited control: - One entity pays many - One entity settling invoices to multiple subsidiaries - AP-driven - Kicked off by accounts payable, not treasury - Large amounts - $5-20M/month out of one account - Visibility gap - Treasury doesn't always know when these will hit

"This is where I'm getting literally goosebumps thinking if we could solve this part... it's really good. And it's complex, but that's what we're here to solve for." - Gurjit (Palm Internal, 2026-02-02)

Customers are adding MORE granular IC categories, not fewer:

"They're adding more categories to intercompany. They're reducing all the categories at the top, and they're wanting to spread out into company mode. That's like a universal thing." - Gurjit (Palm Internal, 2026-02-02)

Typical Processes & Timing

ON's Cash Pool Structure (Source: 2025-11-17) - Master account: on AG - Participants: Germany, Spain, Sweden, Netherlands, Belgium, Austria, etc. - Sweeps: Automatic, can be daily in some entities - Interest/Settlements: Monthly or quarterly

Personio's 743 Account Funding Logic (Source: 2026-02-18) Tom described a non-zero-balance pool scenario: the 743 account keeps a 500K buffer (not zero-balance) to cover customer refund risk before daily collections arrive. Rodel building forecast-based funding logic — round amounts based on forecast of collections and bank transactions minus buffer. Tom confirmed this aligns with how they fund.

Tools They Use Today

  • Kyriba - Has cash pool setup but doesn't forecast sweeps or show them cleanly
  • Manual naming - Named accounts in Kyriba as "Cash Pool Master" or "Participant" since no proper categorization exists
  • Mental math - Know that negative balances on pooled accounts are okay

How They Talk About It

  • "Cash pool" / "Zero-balance pool" - The pooling structure
  • "Master account" / "Header account" - Central account
  • "Participant" - Subsidiary account in the pool
  • "Sweep" - Automatic transfer to/from master
  • "Touch sweep" - Sweep that affects balance

Sources: view all