The big confusion around internal accounts is around the Nostro / Vostro concept, and how we or the client intend to apply it. Given that most in house bank structures grow out of cashpooling structures, where the “In House Bank” is the cashpool header. It is possible in this model for the cash pool header entity to have just one account to represent its intercompany liability for all the cash it has received – in which case it is important to calculate the interest at the subsidiary level and mirror it (so we have built this into the Deal Mirror Service)
However, when we move to a true In House Bank, we need to account for the Vostro account side at the bank, so each In House Bank account has an exact mirror in the IHB entity, which is truly the bank but not necessarily the pool header. In fact with structures in is far more likely the client will start to move away from cash polling and start using POBO /COBO structures, with the idea that eventually all transactions could be settled via a few central accounts, and subs only have IHB accounts and settle everything as a POBO.
Ideally then I would like to see:
- The ability to automatically create the Vostro account at the IHB if this is really what the clients want. This will always be a complete mirror of the Nostro account in the sub, including interest cashflows. Getting this to work in accounting terms will require us to link the IHB account to another entity as bank rather than a counterparty.
- We often struggle to identify the correct counterparty for Account Interest (AI) deals for GL Interface
- It would be ideal to have AI deals automatically generate intercompany entries.
- Bank Account Transfers also cause problems, as the obvious way to find the counter-entity is to follow the cashflows, which is fine until the deal is deleted and we interface the reversal entries (at which point the cashflow have been deleted…)
