Will POBO and COBO deliver you to the promised land of single-account banking?
By implementing POBO and COBO where possible today, and continuing to enhance cash visibility and optimize cash concentration and in-house bank structures, you can move your corporation closer and closer to the ideal cash management structure.
Companies have been considering POBO structures for the last six or seven years, Citi's Sinha said, but SEPA makes them easier to use because the XML standard provides POBO fields that contain information to help the company identify which customer is paying for what, expediting reconciliation.
But companies need to check first that they are able to use POBO, because in some countries, local tax regulations or commercial laws may not allow it, Sinha said.
Zanders' Knol pointed out that POBO and ROBO structures and virtual accounts all predate SEPA and can be implemented in other parts of the world besides Europe.
It is not yet common practice, but we expect it to become much more prevalent for corporations to use POBO in Western Europe within the next two to three years.
One challenge for companies using POBO can be the process of divvying up the files the bank sends back about the payments to provide each business unit with the information it needs.
POBO works best for "large multinationals with complex structures," he said.
Pre-SEPA there was a lack of standardization, limiting the effectiveness of POBO and COBO since groups with one or both of these structures in place had to maintain a multitude of different local bank accounts to handle local payments and/or collections on behalf of their subsidiaries.
As such, ARM can greatly simplify a client's rollout of POBO and COBO structures.