By the late 1990s, treasury operations at International Paper Co. had become very decentralized. As it built up its global business, IP treasury's evolving infrastructure included multiple bank platforms, lots of bank accounts and some cash balances that had literally dropped below the radar screen of corporate headquarters. Inefficient? Definitely. But the potential dangers of the situation were brought home to the company a couple of years ago when a bank employee alerted it to an attempted fraudulent wire transfer.

Treasury needed more than tweaking; it needed an overhaul. So beginning in 2001 and then in 2002, the paper products giant took a scalpel to its treasury operations and made some startling discoveries, including $60 million in cash that was lying fallow or less than optimally invested.

At first, the effort focused on consolidation, slashing the number of IP's overseas bank accounts from more than 500 to close to 300. Fewer bank accounts meant lower management and administration fees and fewer transactions. Besides efficiency, IP is ending up with savings of $400,000 a year on banking and transaction costs. Fewer accounts also made cash more visible, which let IP earn an additional $1.4 million a year in income on its cash.