A Zero-balance account (ZBA) is a type of bank account that is designed to maintain a zero balance throughout the day. It is commonly used by businesses to efficiently manage their cash flow and streamline their financial operations.

The main purpose of a ZBA is to consolidate funds from multiple accounts into a single account, while ensuring that the balance remains at zero at the end of each business day. This allows businesses to maximize the utilization of their cash by centralizing it in one account and minimizing idle balances in separate accounts.

With a ZBA, businesses can optimize their funds by automatically transferring funds from subsidiary accounts to cover expenses or meet payment obligations. This eliminates the need for manual transfers and reduces the risk of overdrafts or insufficient funds.

ZBA accounts are typically linked to a master account, which serves as the main funding source. At the end of each day, any excess funds in the master account are used to offset any deficits in the subsidiary accounts, maintaining a zero balance overall.

Overall, ZBA accounts provide businesses with greater control over their cash flow, enhanced efficiency in fund management, and simplified reconciliation processes.