Introduction

Cash concentration approvals authorize the automated rules that govern inter-account fund transfers within an organization's account structure. These approvals validate automation configurations before they can generate transactions, ensuring that automated fund movements receive appropriate oversight separate from the individual transactions they produce.

Unlike payment approvals that authorize specific transactions or counterparty approvals that validate beneficiary data, cash concentration approvals authorize the automation logic itself. Once a rule is approved, it can automatically generate transactions based on its configuration—but those transactions still flow through their own approval processes according to applicable signatory rules.

Why separate rule approval

Cash concentration rules create automated transaction flows. Approving the rule authorizes the automation concept and configuration, while the generated transactions follow standard payment approval workflows.

Risk addressed

Automation configuration: Cash concentration rules define complex logic for when and how funds move between accounts. Configuration errors could cause unintended fund movements across the account structure. Independent review validates the automation logic before it becomes active.

Business intent: Automated sweeps and transfers serve specific treasury management objectives. Rule approval ensures the automation aligns with treasury policies and business requirements before funds begin moving automatically.

Threshold validation: Rules specify amounts, thresholds, and timing for automated transfers. Approval validates these parameters against organizational policies, ensuring automated movements stay within acceptable boundaries.

Account relationships: Rules define which accounts can send and receive automated transfers. Approval confirms these account relationships match intended cash management structures and appropriate authorization levels.

The rule approval workflow

Cash concentration rules move through defined stages from configuration through approval to active automation.

Workflow stages

Rule creation: A user with creation permissions configures a new cash concentration rule by specifying source and destination accounts, defining trigger conditions and thresholds, setting execution timing and frequency, and configuring transfer amounts and limits. This creates a rule in draft status.

Pending approval: The rule remains in draft status, generating no automated transactions. The system identifies eligible approvers—users with authorization permissions who did not create the rule. Eligible approvers receive notifications about the pending rule.

Review and authorization: An approver reviews the rule configuration, validates trigger logic and threshold settings, verifies account selections match intended behavior, confirms alignment with treasury policies, and either approves or rejects the rule. The four-eyes principle prevents self-approval—the rule creator cannot approve their own configuration.

Active automation: Upon approval, the rule becomes active and begins evaluating conditions according to its schedule. When conditions are met, the rule generates inter-account transfer transactions. These generated transactions enter the payment workflow and follow applicable signatory rules for authorization before execution.

Rule modification

Changes to existing cash concentration rules trigger the approval workflow again. When a user modifies rule parameters, those changes create a new pending version. The existing approved rule continues operating with its original configuration until the modified version receives approval. Upon approval of changes, the updated configuration replaces the original rule.

Two-layer approval concept

Cash concentration combines two distinct approval layers: rule approval for the automation configuration, and transaction approval for the generated payments.

Rule layer approval

Rule approval authorizes the automation itself—the logic, conditions, and parameters that will generate transactions. This approval validates the configuration is correct, appropriate, and aligns with organizational policies. Rule approval occurs once when the rule is created or modified.

Transaction layer approval

Generated transactions flow through standard payment approval workflows. Even though a rule is approved to create transactions, those transactions still require authorization according to applicable signatory rules before submission to the bank. Transaction approval occurs for each generated payment.

This two-layer approach means treasury managers approve the automation strategy (rule layer) while payment approvers maintain oversight of individual fund movements (transaction layer). Both layers must function correctly for automated transfers to execute successfully.

Rule-specific signatory requirements

Cash concentration rules can be configured with their own signatory rule that applies specifically to transactions generated by that automation. This allows organizations to define approval workflows tailored to automated transfers separate from manually created payments.

For example, automated sweep transactions might require fewer approvals than manual payments of similar amounts, or automated transfers might be configured for auto-approval while maintaining manual approval for other payment types. The cash concentration rule approval authorizes this differentiated treatment.

Permission structure

Cash concentration approval uses dedicated permissions separate from payment approval and counterparty approval permissions. This allows organizations to segregate who can configure automation from who can authorize transactions.

Permission separation

Users may have permission to create cash concentration rules but not approve them, or permission to approve rules but not create them. Treasury management roles typically combine both creation and approval permissions for cash concentration rules, though the four-eyes principle still prevents self-approval.

The permission structure allows organizations to assign automation configuration to treasury specialists while keeping transaction approval with finance controllers, or vice versa depending on organizational preferences.

Audit trail for automation

Cash concentration rule approvals and modifications generate comprehensive audit records. These records document who created the rule and when, who approved the rule and when, what configuration parameters were set, when the rule became active, and what modifications were made over time.

When rules generate transactions, those transactions reference the originating rule in their audit trail. This creates end-to-end traceability from the approved automation configuration through to the executed bank transfers.

Support

For questions about cash concentration approval concepts or automation strategy, contact [email protected].