FTI Treasury Talks: Intercompany Netting, Cutting Costs, Unlocking Liquidity and Streamlining Treasury

About this Episode

In this episode of FTI Treasury Talks: Conversations with the Experts, we take a close look at intercompany netting, one of the most impactful yet underutilised tools available to treasury teams in multinational organisations.

Justin Callaghan, CEO of FTI Treasury, is joined by Shane O’Keeffe, Head of Innovation and a subject-matter expert in intercompany netting, who brings extensive hands-on experience implementing and managing netting processes for a wide range of multinational and financial services clients. Together, they explore how a well-structured netting process can eliminate up to 70-80% of internal wire transfers, and why the cost savings are only the starting point of a much broader treasury opportunity.

The conversation walks through the mechanics of a typical netting cycle, the practicalities of implementation and ERP connectivity, and the less obvious ways in which treasurers can leverage netting once the process is in place. This session is particularly relevant for professionals involved in treasury and cash management, intercompany accounting and shared services, financial operations and ERP management, and CFO and finance leadership teams.

Key Topics Covered

• Intercompany Netting Explained What netting is, how it clears down intercompany invoices between subsidiaries, and why most organisations settle each netting cycle with a single payment per entity in its base currency.
• The Well-Known Benefits Reduced transaction costs, centralised FX execution at competitive rates, the release of trapped liquidity, and faster resolution of intercompany disputes.
• The Treasury Advantages Beyond the Business Case How netting supports FX exposure management and cash flow hedging, improves visibility over credit facilities and external borrowings, and strengthens forecasting.
• Netting and the In-House Bank How settling against intercompany loans removes the need for physical cash settlement, reducing liquidity and settlement risk while simplifying operations.
• Implementation and the Netting Cycle What a typical four to five day cycle looks like from cycle dates to reconciliation, ERP integration options, and what participants can expect during onboarding.
• Extended Use Cases Settling treasury activity and intercompany loan interest, clearing non-functional currency loans, handling internal FX requests, and extending netting to external vendors.

Why Intercompany Netting Matters

FTI Treasury’s experience across its client base shows that organisations typically save between $3 million and $10 million per annum once a netting process is in place, and that figure covers transaction costs and FX gains alone. Beyond the financial case, an effective netting framework allows treasury teams to:

• Replace hundreds or thousands of individual payments with a single settlement per entity
• Manage FX exposures centrally and align hedging activity to a defined date each cycle
• Reduce settlement risk, liquidity requirements and daylight overdraft needs
• Improve forecasting accuracy and visibility over internal cash flows