Transparency Now!

by Hubert Rappold, CEO, TIPCO Treasury & Technology

Bank fee controlling is fun – how automated bank fee controlling can improve treasury operations.

‘Fun‘ is usually not the first word that comes to mind when you think about controlling bank fees. ‘Frustrating‘ and ‘time-consuming‘ usually head the list. That is hardly a surprise given the current situation in many companies. Bank fee statements are usually paper-based and there is no information about agreed fees to facilitate comparison. Very often this task ends up with a new colleague or an intern who fight their way through stacks of paper and endless spreadsheets. Inevitably, given this approach, a professional monthly check of all fees is simply not feasible.

Why bother about bank fees?

This is rather unfortunate, since bank fee statements contain a wealth of information that can be used by the treasurer. Let’s take a look at them in turn:

• Of course the first and main benefit is monetary. If a price was agreed with the bank, you would expect to be billed that price. To err is human, so it is always worth checking if the agreed fee found its way into the bank‘s billing engine. If not, you might want to reclaim money from the bank.
• If you have a clear overview of all products used on a global basis you can quickly see if those products actually make sense. You might discover that some of the products are quite pricy and could be replaced by more appropriate ones.
• If you have a clear insight into all the fees billed, you can quickly check if entities in one country/region are paying more for a service than they should compared to their peers. You can then initiate negotiations with the bank in question.
• If you get charged a considerable amount of repair fees you might ask yourself why these fees are levied in the first place. To avoid these costly fees in the future, a check of your internal systems and processes might be appropriate.
• Using your fee structure you can quickly identify unused accounts for which you are still paying maintenance fees. Doing this allows you to identify accounts to be closed.
• If an entity opens a new bank account you can be pretty sure that the bank will try to bill it as soon as possible. If you encounter a new bank account in your fee statement you can integrate it into your normal financial status reporting and you might have a word with the entity about why they did not report it in the first place.

Click here to see a guide on how to process electronic bank fee statements

How much money will I save?

As a rule of thumb expect savings of between 5% to 10% of your banking fees.

How to get started?

To take advantage of all these points you need ask your bank for a bank fee statement in electronic form. In the US and Canada this is already standard, using the ANSI 822 format. In other areas of the world not all banks are yet able to provide the bank fee statements. If they provide them, the statements are usually in the format ‘TWIST BSB‘ or ‘camt 086‘. In the worst case, you can also accept spreadsheets as an intermediate solution.

I strongly recommend that you do not agree to pay for the provision of these statements. It should be part of a fair relationship to get the information about services and associated costs without having to pay extra for it! After all, in the normal corporate world it is usual to get a discount if you accept electronic fee statements from your vendors. If you want to play it hard you could only pay bank fees for which you get electronic statements.

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I have the files. What’s next?

Well, you have three options.

• Buy a new system that can process these files.
• Extend an existing system to provide these capabilities.
• Simply submit the bank fee statements to a cloud-based service that processes the information for you.

The table on the previous page highlights the pros and cons of each solution. Which one is right for your company really depends on your existing system landscape and the costs associated with each solution.

Get in touch

If you want to find out more about bank fee controlling, simply get in touch with me at [email protected]. Based on your files we provide a free-of-charge prototype that will show you the benefits of automated bank fee controlling.

Hubert Rappold is CEO of the TIPCO Treasury & Technology GmbH, a leading software provider for treasury reporting in Germany, Austria and Switzerland. Since 2004 he is substantially involved in the functional and technological development of the Treasury Information Platform TIP. More than 100 corporations worldwide are using TIP to create flexible and comprehensive financial reports.

TIPCO Treasury & Technology GmbH
www.tipco.at
[email protected]