Cross-border Treasury Centralization Of Multinational Corporation Based On Cash Pooling Mode

In recent years,with the acceleration of global economic integration,more and more corporations achieve group development with cross-time zone,cross-region,cross-country in the process of expanding corporation scale.Treasury is compared to blood of corporation,circulating in all aspects of production,operation and management,providing continuous support for the development of corporation.Treasury centralization is a strategy adopted by most multinational corporations at advanced stage of development,to realize efficient cash operation,expand profit margin and enhance market competitiveness.However,most multinational corporations are facing with the same problem of cross-border cash management.Due to strict foreign exchange controls in some countries,free cash flow cross border is hard to achieve.Therefore,corporations try to seek appropriate management mode to break the bottleneck.As advanced management framework,cash pooling is selected as a suitable management mode by more and more corporations.Cross-border treasury centralization of multinational corporation as research subject,cash pooling mode as research point cut,based on summaries of relevant theoretic and research results of scholars home and abroad,taking treasury centralization of Asian region of a large multinational corporation LF as example,the paper reviews current situation of cash management of the multinational corporation,discovers exising problems in overall management of cash flow,cross-border financing and financial performance.Based on business characteristics and construction ideas of cross-border cash centralized management,the paper designs structure of centralized management of cross-border cash pooling,utilizes the relevant theories of cash management to provide corresponding improvement strategies,supporting measures and evaluates expected effect after implementation.The research shows that,the implementation and go-live of cross-border cash centralization project based on cash pooling would effectively realize the overall management of cash flow,relief barriers to cross-border cash flow,and greatly improve the efficiency and benefit of operating cash.In general,centralized management of cross-border treasury and the establishment of cash pooling help multinational corporation integrate internal resources,optimize account structures,improve management efficiency,reduce financial costs,help multinational corporations with adequate cash resources in fierce market competition,optimize resource allocation,improve flexibility of cash usage,and ultimately achieve development and strategic goals of multinational corporations,which is of significant reference for other corporations which have similar demand on treasury centralization.