In finance, a Zero Balance Account (ZBA) is a system of cash pooling (to consolidate the cash balances of several
subsidiaries
A subsidiary, subsidiary company, or daughter company is a company completely or partially owned or controlled by another company, called the parent company or holding company, which has legal and financial control over the subsidiary company. Unl ...
of a single company). This system is designed to leave in the current accounts of the subsidiaries the minimum amounts to be able to deal with their debts contracted.
The main advantage of this system is to centralize the cash to be able to put it to better interest rates.
This system may have the disadvantage of not allowing enough independence to financial subsidiaries.
See also
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Cash management
Cash management refers to a broad area of finance involving the collection, handling, and usage of cash. It involves assessing market liquidity, cash flow, and investments.
In banking, cash management, or treasury management, is a marketing term ...
* Target balance account
References
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Bank account
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