Zero Balance Accounts

Maintaining separate deposit accounts for the purposes of managing your company’s cash flow and identifying sources and uses of funds can be challenging. Manually monitoring account balances and frequently transferring funds between accounts to maintain funding levels is time consuming and can cause issues resulting from excessive or insufficient balances.

A Zero Balance Account (ZBA) structure can help. With ZBA, you can pool funds in a master account during the day while effortlessly maintaining separate subordinate deposit accounts with either a zero balance or a targeted balance. During nightly processing subordinate accounts are funded or swept - based on daily activity - precisely to zero or to a specified targeted balance.

Zero Balance Account Benefits:

Savings

  • Eliminates idle cash
  • Reduces bank costs associated with account transfers

Control

  • Centralizes control of cash while maintaining decentralized disbursement and depository functions
  • Separate monthly statements are produced for each sub-account with transaction details (including ZBA transfers) that provide an audit trail
  • Two (2) tiers of sub-accounts can be established with a master account designated in the tier above

Efficiency

  • Eliminates time spent monitoring and transferring account balances
  • Simplifies financial decision-making
  • Streamlines account reconciliation

 

 

 

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