For a company that does as much business globally as Microsoft does, minimizing foreign exchange risk and bank fees can have a significant impact. That's why Fanny Niu, a Beijing-based senior finance manager for Microsoft's Global Treasury & Financial Services division, initiated a project to net the company's accounts receivable (A/R) and accounts payable (A/P) balances with a major supplier.

The supplier, which is based in Taiwan, produces specific hardware devices for Microsoft. Each company runs both A/R and A/P balances with the other. Microsoft purchases $4 billion to $6 billion of raw materials annually, provides those parts and other manufacturing inputs to the device supplier, and then purchases finished goods from that same supplier. Every month, Microsoft owes the device supplier for the finished goods, and the supplier owes Microsoft for the materials provided.