Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Software giant Microsoft sells its products worldwide through more than 10,000 distributors or partners. For the most part, these firms are billed in U.S. dollars, although they sell in their local currencies. That difference creates a currency risk, one that can literally bankrupt a distributor. Large distributors like Dell, of course, have sophisticated foreign exchange hedging programs that limit the risk of a currency’s sharp devaluation. Smaller firms are a different story. “Last year, when there was a major dollar rally, some smaller distributors were literally selling our product at a loss,” says Microsoft treasurer George Zinn. “They were underwater on the trade. If they go under, we then have to write off the uncollectible accounts receivable.”

Treasury & Risk

Join Treasury & Risk

Don’t miss crucial treasury and finance news along with in-depth analysis and insights you need to make informed treasury decisions. Join Treasury & Risk now!

  • Free unlimited access to Treasury & Risk including case studies with corporate innovators, informative newsletters, educational webcasts, and resources from industry leaders.
  • Exclusive discounts on ALM and Treasury & Risk events.
  • Access to other award-winning ALM publications including PropertyCasualty360.com and Law.com.

Already have an account? Sign In Now
Join Treasury & Risk

Copyright © 2019 ALM Media Properties, LLC. All Rights Reserved.