Group treasury
Multilateral netting
A multinational's subsidiaries are constantly paying each other — for goods, services, royalties, interest. Sending each of those as its own cross-border wire burns FX spread and fees moving money in circles. Netting offsets the mutual obligations and settles only the difference.
The idea, in one example
Suppose the US entity owes the UK entity ten million, and the UK entity owes the US entity eight million. Rather than send two payments, the engine nets them: a single two-million payment from US to UK settles both. Do that across every entity at once and a web of gross payments collapses to one net payment per entity.
What a cycle shows
Each netting cycle records the obligations that went in — a grid of who owed whom — and the net position it computed for every entity: what they owe in total, what they are owed, and the single signed figure that replaces all of it. A positive net position means the entity receives; a negative one means it pays.
The headline is the saving: how many gross payments became how few net ones, and the FX and wire cost avoided on the difference.
Good to know
The net positions across all entities always sum to zero — every dollar owed is a dollar owed to someone.
Recalculating a cycle re-derives the positions from the obligations, so the two can never drift apart.