CTP (ABC) key terms

The daily process of consolidating all bank account balances and transaction activity to determine the company's true cash position and to decide how much to invest, borrow, or transfer.

The portion of a bank account balance immediately usable for payments or investment, after subtracting holds and deposits that have not yet been collected.

The difference between a company's book cash and its bank cash, caused by checks or electronic payments that have been issued but not yet cleared.

A central bank account into which funds from multiple depository accounts are swept, giving treasury one pooled balance for investing excess cash or funding disbursements.

A disbursement account funded exactly as checks and payments clear, so its end-of-day balance returns to zero and idle cash remains in the master account.

An automated transfer that moves cash above or below a target amount between accounts, or between a bank account and an investment, to optimize liquidity.

A projection of expected cash receipts and disbursements over daily, weekly, or longer horizons, used to plan borrowing, investment, and liquidity buffers.

A centralized treasury structure that manages intercompany funding, payments, and foreign exchange on behalf of subsidiaries, reducing external bank accounts and strengthening control.

A bank arrangement that offsets debit and credit balances across participating accounts for interest calculation without physically moving the funds between those accounts.

Automated Clearing House: a batch-oriented U.S. electronic payment network used for direct deposits, vendor payments, and consumer debits, settled through the Federal Reserve or a private operator.

An irrevocable electronic payment of funds, typically used for large or urgent amounts, settled through Fedwire in the United States or correspondent banking networks internationally.

Society for Worldwide Interbank Financial Telecommunication: a messaging network used by financial institutions to exchange standardized payment and securities instructions; it carries messages but does not itself move or settle funds.

A fraud-prevention service in which the company sends the bank a file of issued checks or payments, and the bank rejects any presented item that does not match.

A bank-operated post office box where customer payments are received, processed, and deposited, shortening mail float and accelerating availability of receivables.

A centralized unit that executes payments for multiple legal entities on shared systems and controls, improving standardization, cost efficiency, and regulatory compliance.

Payment schemes that transmit and settle funds between accounts within seconds, operating continuously, enabling instant disbursements and new treasury use cases.

The number of days from paying suppliers to collecting from customers, computed as days inventory outstanding plus days sales outstanding minus days payable outstanding.

The average number of days it takes to collect receivables after a sale, a key measure of collection efficiency and credit policy effectiveness.

The average number of days a company takes to pay its suppliers, which lengthens the cash conversion cycle when extended.

A bank- or platform-funded program in which suppliers can be paid early at a discount based on the buyer's credit rating, improving supplier liquidity without the buyer borrowing.

A buyer-funded technique in which suppliers may choose early payment in exchange for a discount whose rate varies with how early the payment occurs.

The sale of receivables to a third party at a discount, providing immediate cash and transferring collection responsibility and credit risk to the factor.

A graph of interest rates across maturities for a given issuer or market; its shape signals expectations for rates, economic growth, and inflation.

A measure of a bond's price sensitivity to interest rate changes, expressed in years, combining time to cash flows and their present value weights.

One hundredth of one percentage point (0.01%), the standard unit for quoting interest rates, credit spreads, and yield changes in fixed income markets.

Secured Overnight Financing Rate: a benchmark interest rate based on U.S. Treasury repurchase transactions, widely adopted as the replacement for U.S. dollar LIBOR.

A contract in which two parties exchange fixed and floating interest payments on a notional principal, used to manage or hedge interest rate exposure.

The blended after-tax cost of a company's debt and equity, used as the discount rate for evaluating investment decisions and capital allocation.

A governing document that sets permitted instruments, credit quality limits, maturity limits, and objectives for investing the company's excess cash.

A mutual fund investing in short-term, high-quality debt instruments that seeks a stable net asset value and provides daily liquidity for cash investors.

A committed bank line that can be drawn, repaid, and redrawn, providing standby liquidity for seasonal, capital, or unexpected funding needs.

An unsecured short-term promissory note issued by large corporations, typically with maturities up to 270 days, used to fund working capital and short-term needs.

The risk that exchange rate movements change the value of already contracted foreign currency cash flows, such as receivables, payables, or loan repayments.

An agreement to exchange a specified amount of one currency for another at a fixed rate on a future date, used to hedge currency risk.

A statistical estimate of the maximum loss a portfolio could suffer over a given time horizon at a specified confidence level.

The risk that a bank or trading partner fails to perform on a derivative, deposit, or payment obligation, causing a financial loss to the company.

An internal control principle that divides authorization, custody, and recordkeeping among different people so no single individual can complete a fraudulent transaction alone.

Software that consolidates cash positioning, payments, debt, investments, and risk data, often integrated with ERP systems and bank connectivity channels.