Managing money flows

    We can help you optimise your international money flows. If you are going to do business abroad, it is important to manage your international money flows properly. This will ensure that you have the right amount of cash available at the right times to fulfil your financial obligations.

    Optimal structuring and planning of your money flows will result in: 

    better control of financial risks and availability of cash lower operational costs a better interest-rate result reduction of any funding requirement

    We can offer you various international payment instruments to manage your money flows. It does not matter whether you work in a decentralised manner with various international branches, centralised with a large quantity of cross-border payment transactions, or something in between. Contact your account manager to discuss your situation.

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    Managing money flows

    Country information

    Before you start doing business in another country, it is important to ensure that you are well informed about the political and economic situation there. With regard to managing your money flows, you can also take the following factors into account:

    Payment culture: in the Netherlands, we are used to payments being made within 30 to 60 days after delivery. In other countries however, payment terms of 90 days or even longer can be the norm. Local currency: do you accept the exchange-rate risk, or would you rather pay (and be paid) in euros instead? Local payment solutions: are these practical for opening a foreign account?

    Accounts structure

    Companies generally use a number of bank accounts for various organisational purposes. With our knowledge we can support you in setting up an efficient accounts structure. You should consider the following:

    In which currencies do you need accounts? In which countries do you need local accounts? How many accounts do you need per country and currency? Which people within your organisation need insight into these accounts?

    It will be useful to investigate within your organisation whether your cash management can be more centralised. You can then use our European payment products. This is useful if you trade in euros and:

    do not have any branches and/or employees abroad do not want to use specific local payment products want to receive or initiate payments at the lowest possible cost

    Payment products

    Do you need local accounts abroad? Via our own network of offices and our partner banks in the most important trading countries, we offer the option to open accounts in various currencies. This helps you to keep control of your international money flows. Please contact your account manager to discuss the options in relation to your situation.

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    Foreign account

    If you want to receive payments more quickly by using local payment or collection products, or if you want to credit received cheques quickly and cheaply, a foreign account may be a good idea.

    Foreign currency account

    If you do business with foreign trading partners, you may have to use currencies other than euros. You should then take account of:

    currency risks local currencies which cannot be exported currencies which cannot be freely exchanged for other currencies

    If you do business using foreign currency, it may be worthwhile to open a foreign currency account. This will enable you to purchase or sell currency any time you want.

    If you have a temporary surplus of one currency and a deficit in another, we can help you regulate your adverse liquidity position with a currency swap. Such an adverse position can occur, for example, if you have to pay debit interest for a deficit on your euro account, while you have a temporary surplus in your foreign currency account because you already bought the currency for a future payment.

    Your corporate transaction portal

    Rabo Corporate Connect gives you insight into and a grip on your international money flows. You can use this portal to initiate domestic and foreign payments and collections, taking account of your authorisation structure. Instructions generated can be approved in the Netherlands or abroad as desired. If you submit your instructions on time, these will be executed the same day.

    Optimisation of money flows

    You can use a number of different techniques to optimally manage your accounts and minimise costs. The most commonly used options are balance concentration and balance/interest compensation.

    Balance concentration

    Balance concentration means that you concentrate the positive balances in a number of different accounts in a single main account and/or offset negative balances so that you pay less debit interest and earn more from your funds in credit. You determine when and how much you wish to sweep or set off against your account balance.

    With Zero Balancing, the complete balance of your account(s) is transferred (automatically) to the main account of your choice at the end of each day. The same can also be done with your foreign accounts. This means a zero balance is left in your foreign accounts and you have immediate access to the balances in the Netherlands.
    Balance/interest compensation

    By including your accounts in a balance and interest compensation system the balances of these accounts are automatically combined for approval (balance compensation) and/or interest calculation (interest compensation). This combination is purely arithmetical. Your balances are not actually transferred to a main account as with balance concentration, but remain in individual accounts.

    Although balance compensation is possible between different currencies, it cannot be used between accounts with different banks. Interest compensation takes place only between accounts in the same currency with the same bank.

    Putting aside temporary surpluses

    You may have a surplus due to rapid and efficient sweeping and you want to put this amount aside to earn additional interest. Ask your account manager to tell you about the possibilities.

    Financing deficits

    Do you expect more outgoing than incoming payments on your foreign account in the near future? You could then be exposed to the risk of your payments not being executed due to insufficient funds. In this case you have the following options:

    you can make up the balance from the Netherlands you can sweep the surplus from your foreign accounts to the Netherlands and make all your outgoing payments from your Dutch Rabobank accounts you can apply for a credit facility for your foreign account

    Your account manager can advise you about a temporary or continuous credit facility. You can also move part of your Dutch credit abroad or have claims against your Dutch and foreign customers pre-financed.