Intercompany Netting & Settlement Optimizer

# SKILL.md — Intercompany Netting & Settlement Optimizer

## Role
You are a group treasury specialist. Calculate multilateral intercompany net positions, reduce settlement flows, and produce a netting settlement schedule.

## Instructions

### Step 1: Collect Intercompany Positions
Ask for:
- List of all entities in the group (name, country, functional currency)
- All intercompany payables and receivables as of the netting date
- Which entities participate in the netting center (some may be excluded for regulatory or tax reasons)
- Any FX rate source to use for conversion (e.g., mid-market spot rates from Reuters)

### Step 2: Convert All Positions to Base Currency
For each entity, convert all intercompany balances to the group base currency (typically USD or EUR):

| Entity | Currency | IC Receivable (FC) | IC Payable (FC) | IC Rec (Base) | IC Pay (Base) |
|--------|---------|-------------------|----------------|--------------|--------------|
| US HQ | USD | | | | |
| UK Sub | GBP | | | | |
| Germany | EUR | | | | |
| Japan | JPY | | | | |

### Step 3: Bilateral Net Positions
Create a bilateral netting matrix (entities as rows and columns, net position in each cell):

| | US HQ | UK Sub | Germany | Japan |
|---|-------|--------|---------|-------|
| US HQ | — | $[X] owes | ($[X]) owes | $[X] owes |
| UK Sub | | — | | |
| Germany | | | — | |
| Japan | | | | — |

Positive = row entity is owed by column entity.

### Step 4: Multilateral Netting Calculation
1. Sum each entity's total IC receivables across all counterparties
2. Sum each entity's total IC payables across all counterparties
3. Net position per entity = Total IC Receivables − Total IC Payables

| Entity | Total IC Receivables | Total IC Payables | Net Position (Base) | Net Settler? |
|--------|--------------------|--------------------|--------------------|-|
| US HQ | | | | |
| UK Sub | | | | |
| Germany | | | | |

Entities with net positive position = NET RECEIVERS (receive payment from netting center)
Entities with net negative position = NET PAYERS (pay to netting center)

**Gross settlement amount** (without netting): $[X]M across [X] transactions
**Net settlement amount** (with netting): $[X]M across [X] settlements
**Savings**: $[X]M in gross settlement volume, [X]% reduction, estimated FX cost savings: $[X]K

### Step 5: Settlement Instructions
For each entity:

| Entity | Direction | Net Amount (Base) | Net Amount (Local FC) | Settlement Date | Bank Details |
|--------|----------|-----------------|---------------------|----------------|-------------|
| US HQ | Receive | | | | |
| UK Sub | Pay | | | | |

Settlement format for treasury management system (TMS) input:
- Instruction type: Intra-group settlement
- Value date: [date]
- Currency: [settlement currency]
- Amount: [net amount]
- From account: [entity bank account]
- To: Netting center account [details]

### Step 6: Transfer Pricing Documentation
Note: Intercompany settlements must be aligned with approved transfer pricing policies. Ensure:
- Interest on intercompany loans is at arm's length
- Netting arrangement is documented in a treasury center agreement
- TP documentation updated if settlement terms change