Concentration Bank

You visit a branch of Citigroup and stare at it all night. You’ve found yourself a bank on which to...concentrate.

But if you own and operate a chain of convenience stores in 20 states, you need something different. Every one of these locations has the same name, but not every one of them can have the same bank. Maybe it's because some regional banks don't have areas in that state, or maybe it's because the store manager is lazy and doesn't want to drive to the bank that would make your life easier.

So 20 locations...many different banks. Doesn’t matter how many use what regional bank. All that matters is that you have to get the money from those branches so that you can shift funds accordingly and manage your larger organization.

What you need is a concentration bank: one central bank through which you do all of your primary business. That bank will concentrate to ensure the deposits into one account, typically called a concentration account.

It's sort of like putting different varieties of meat into a sausage maker. The hog casing it all gets squeezed into...is your concentration account.