Cash positioning
Cash positioning is the daily process of gathering balances and transactions across all bank and partner accounts. It shows how much cash is available, where and in which currency.
How it works
J.P. Morgan describes cash positioning as bringing daily balance and transaction data from every account into one place. The view tracks opening and available balances for each account. Bank APIs can feed this data automatically. Treasury management systems provide this kind of real-time cash visibility.
For a cross-border payment firm, the position must cover more than bank accounts. Prefunded partner balances, funds in flight and expected customer settlements all change what is usable today. The position then drives top-ups, FX conversions and sweeps before each cut-off time.
Pitfalls include mixing ledger and available balances, and relying on stale statements. Another is treating customer funds and own funds as one pool. Each position also needs a timestamp, since balances change through the day.
Example
Illustrative example: At 09:00 a firm sees $4,000,000 across its US accounts. Of this, $1,500,000 is customer money held against outstanding obligations and $500,000 is pledged as collateral. Usable own cash is $2,000,000. The Mexico corridor needs a $1,200,000 top-up, leaving $800,000 unallocated.
Frequently asked questions
How often should we run a cash position?
At least daily, before the first funding cut-off. Firms with real-time payout rails often refresh it during the day as well. The right cadence depends on how fast balances move relative to your cut-off times.
What is the difference between cash positioning and cash forecasting?
Positioning shows what you hold now and can use today. Forecasting projects inflows and outflows over the coming days or weeks. Positioning drives today's funding moves; forecasting sets buffers and plans.
Related terms
Sources
- How to create cash flow forecasts and projections · J.P. Morgan
- What is a treasury management system? · Kyriba
Know where all your money is.
Polynopsis gives cross-border payment teams one live position across every bank, payout partner, exchange and wallet, including money in flight, and warns before a corridor runs dry.