Success Storry Goethe-Institut
Cash Pooling – a contemporary approach to financial management
The Goethe-Institut is the worldwide cultural institute of the Federal Republic of Germany. Its mission is to promote the study of the German language abroad and encourage international cultural cooperation. A total of 3,100 employees work to support this cultural exchange in 98 countries.
The global structure of the Goethe-Institut posed a major financial challenge. A diverse banking landscape with varying and highly fluctuating liquidity situations in each country required the optimisation of liquidity and information management.
The task was to identify and set up solutions for global cash pooling. The cash pooling system needed to incorporate accounts held at both Commerzbank and at other banks. In addition, a global information management process had to be created and then integrated into the existing EBsec electronic banking software. Cash pooling transactions and account information needed to be provided electronically for automatic processing in the SAP system.
The first milestone for the Goethe-Institute’s professional cash pooling was establishing a worldwide information management system. This involved integrating the existing EBsec electronic banking system, which incorporated around 360 users. As a result, the SAP system was then able to process electronic account information automatically, making the accounting function more agile and responsive. This put the foundations in place for the next stage. Depending on the company and account, either pure zero balancing (i.e., debit and credit balances of subscriber accounts reconciled to zero each day) or target balancing (i.e., subscriber accounts retain a predefined basic balance) was defined. The result today is that the cash pooling system has incorporated a total of 140 accounts in 98 countries, including third-party bank accounts.