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Comprehensive Service Solutions
Automobile-manufacturing Enterprise Solution
Background of Enterprise
A Sino-foreign automobile-manufacturing company owns 30 units distributed over 10 provinces and cities in China, among them, 20 are its headquarters and subordinate units and other 10 are holding subsidiaries. The company carries out collectivized management and includes 14 subsidiaries (like loading motorcar companies, corporations, XX Auto Co. Ltd), spare part and equipment companies and others. With business scope covering high, middle and low-grade commercial vehicle, passage vehicles, spare parts and equipments of autos as well as others, the company has formed a complete product chain.

The group is adopting loose group organization form, there are huge differences of equities between its subsidiaries and wide regional distribution of the main bodies of calculation, and whole group has over 3,000 accounts in total distributed in 12 commercial banks, as a result, the financial cost of the group is very high, the efficiency and transparency of the fund use are very low and the ability of the headquarters to control the funds of the group is very weak. In order to resolve the problem as soon as possible, the company is planning to conduct fully fund management reformation and establish a high intensive fund management framework.

The company is a large-scale enterprise specialized in the production and the sale of the automobiles with a large sum of accounts receivable and so hope that the bank can help it resolve the problem of reflow of the accounts receivable.

Analysis on Demands of Cash Management
● The client needs to centralize the authority of the headquarters and its subordinate units in external income and expense of funds in the headquarters and the subordinate units are forbidden to keep any fund.
● The client needs to manage its holding subsidiaries in the form of "Zero Balance Accounts" and the funds of these accounts will be liquidated with the account of the headquarters every day.
● The group adopt the management of "Zero Balance Accounts" on its subordinate units and holding subsidiaries and the management shall not have impact on necessary daily payment.
● The client requires the bank to speed up the reflow of the accounts receivable and lower the risk of the accounts receivable.

Cash Management Solution
In the way of account establishment, the group can adopt commission loan fund pool collection mode for his holding subsidiaries and adopt "separation of expense from income" or group account collection mode for its headquarters and subordinate units.

1. Group Cash Management Solution
As to headquarters and its subordinate units, the first mode is "separation of expense from income", means every company establishes its own income and expenditure accounts. The income account is mainly used in reflow of payments for goods and can't be used in handling payment to the third parity except collecting funds for the headquarters of the company; the expenditure account is mainly used in daily operation expenses and can't absorb any fund from the third party except the appropriation from the headquarters of the company. The second mode is group account mode to manage and control the funds of the headquarters of the company and its subordinate units. The headquarter of the company establishes a group general ledger account, the branches establish secondary accounts and the funds of the secondary accounts will be transferred to the level-1 account in real time.

After establishment of account management framework of whole group, ICBC can offer collection and payment service through rich product portfolio and diversified channels. Within the collection service, beside traditional methods like instrument or exchange, ICBC also offers other various services such as internet banking toll station, fixed debit, comprehensive collection and prompt line.

2. Accounts Receivable Solution

In order to resolve the problem of reflow of account receivables, ICBC can offer two solutions: domestic Letter of Credit and accounts receivable factoring. Domestic Letter of Credit is a settlement instrument in order to help two parties of the domestic transaction prevent transaction risk by the intervention of bank credit. Agents can apply for issue domestic Letter of Credit from ICBC, and enterprises can deliver the goods in consideration of the Letter of Credit and submit the notes, or apply for negotiation credit from the bank. After received notes, issuing bank will pay corresponding funds; after payment, agents can get corresponding notes and go through the procedure of taking the delivery of the goods.

Besides domestic Letter of Credit, ICBC also offers domestic accounts receivable factoring business to the company. The bank assists the company to recover the funds by purchasing accounts receivable.

Plan Implementation Effects

Analysis on the plan effects-qualitative contrast


Before application of cash management

After application of cash management

Account system



Information exchange



Risk control



Liquidity management



Credit support



The above content is drafted and executed in Chinese. It is translated into English for reference only. In case there are any discrepancies between the Chinese version and the English Version, the Chinese Version shall prevail. ICBC reserves the right of final interpretation.

The above content is drafted and executed in Chinese. It is translated into English for reference only. In case there are any discrepancies between the Chinese version and the English Version, the Chinese Version shall prevail. ICBC reserves the right of final interpretation.