Part of our POBO & COBO Solutions guide.
The Problem
A group may have many subsidiaries each maintaining collection accounts in several currencies. COBO can concentrate customer receipts into central accounts while internal ledgers and virtual accounts identify which subsidiary owns each receivable.
The correct design starts with the flow of funds: who owns the funds, who owes or is owed money, who owns the external bank account, what the relationship is between the parties, and whether the underlying parties are related group companies or external customers.
Typical Flow
The diagram is intentionally generic. Actual implementation depends on the legal entities, jurisdictions, bank/provider rules, payment rails, currencies, licensing status, and reconciliation model.
Why Treasury Uses COBO
The benefits can include cash visibility, bank-account reduction, easier liquidity concentration, and centralized reconciliation.
Virtual Accounts
Virtual accounts can preserve unique payment instructions while settling funds into a central physical account.
Receivable Ownership
The central collection entity and underlying entity must have a documented relationship explaining who is entitled to the funds.
Core Design Questions
- Who is the legal account owner?
- Who is the economic owner of the funds?
- Who is the debtor and who is the ultimate debtor?
- Who is the creditor and who is the ultimate creditor?
- Are the underlying parties related companies or external customers?
- Which countries and currencies are involved?
- Which rails are required?
- What monthly volume and transaction count are expected?
- Is a named, virtual, pooled, FBO, or safeguarded account required?
- Who performs KYC/KYB, sanctions screening, and transaction monitoring?
- How will the internal ledger and reconciliation work?
What We Can Help With
We can help map the transaction, identify the appropriate banking/payment architecture, determine what type of provider is required, prepare the provider-facing flow of funds, and source or introduce suitable banks, PSPs, MSBs, or program partners where there appears to be a fit.
Frequently Asked Questions
Can customers still pay the subsidiary name?
That depends on the bank and virtual-account model. Some structures support named or uniquely attributable collection references.
Is COBO the same as cash pooling?
No. Cash pooling moves balances among accounts. COBO changes where customer receipts are collected.
Related POBO / COBO Pages
- POBO & COBO Solutions
- What Is COBO / ROBO? Collections On Behalf Of Explained
- POBO for Corporate Treasury and Multinational Groups
- POBO & COBO Account Structures: Named, Virtual, FBO, and Pooled Accounts
- POBO, COBO, In-House Banks, and Payment Factories
Related Services
Get Help Designing This Structure
Send us your entity chart and flow of funds. If you do not have a diagram, describe who pays, who receives, who owns each account, what the underlying obligation is, and where the money ultimately goes.