Microsoft has 350 legal entities operating in 118 countries (and using 1,000 accounts at 100 different banks), so concentrating excess cash efficiently and funding those operations just in time is a formidable challenge that the $70 billion company addressed with eye-catching success.

Long a leader in the use of automation, Microsoft treasury was still using a time-consuming manual process to fund and collect from 175 actively funded subsidiaries in 2010. Funding usually meant wiring funds to the subsidiaries twice a month and wiring back excess balances when local regulations permitted. Treasury knew that daily sweeps to zero balance accounts (ZBAs) was ideal, but doing it manually took time, and the time zone differences made same-day sweeps impossible for Europe and Asia. The key to better control and liquidity management would be a global ZBA structure with same-day automated sweeps and just-in-time funding.

For the accounting to work, the ZBA transfers would have to include customized texts for each transaction, something no ZBA structure was able to provide. But Microsoft found a willing partner in Citi. Together they developed a new product, called Global Concentration Engine, that can incorporate customized texts into the ZBA transactions, explains Jim Scurlock, cash planning manager.

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