AFP Corporate Members Want Standard Format for Cash Reporting

More than 80% of corporate practitioners who responded to a recent Association for Financial Professionals (AFP) survey said they would like to see the Banking Administration Institute (BAI) cash reporting format standardised across banks.

The survey, published in June, has added an extra layer of context and corporate input to a process that already is under way to update the industry standard for cash management reporting. The goal is to create a more uniform approach to cash reporting than what is offered by the format in use today. The BAI last overhauled the format more than 20 years ago.

The Accredited Standards Committee X9 convened a working group last year to take BAI’s format and create an updated, more efficient standard. The group is still working and ASC X9 could publish a document by AFP’s Annual Conference in San Antonio this November, said Jim Willis, senior business manager for banking initiatives at SWIFT, who is helping lead the effort to update the standard.

“Reading [AFP’s] survey, it’s quite clear that the community is looking for the next release of this standard,” said Willis. “Since this BAI Version 2 was just a code list and suggestions as to a format, it was not a true standard. It led to a great variety of interpretation as to exactly what the information meant, and how it was to be presented. It’s like if you were going down the highway, and stop signs were different shapes and colours and sizes.”

Not surprisingly, that has led to a great deal of confusion among corporates, who use the format for a variety of purposes, most often for current or previous-day information reporting. Disparities among banks also have made it difficult for corporates to process that data automatically, leading to costly manual intervention.

The survey also found that 87% of corporate practitioners use the BAI format for current or previous day information reporting, and 72% for controlled disbursements and account reconciliation. Some 54% of survey respondents use the format for lockbox/receivables reporting, while another 29% use it to manage liquidity. Corporates surveyed also reported using the format for account analysis, cleared check review and electronic funds transfers.

Most corporates take the information from an online banking portal, and feed it directly into a treasury management system (TMS) or an enterprise resource planning (ERP) system. Many, though, still must manually intervene to make sure everything is in its proper place – a process that is both time-consuming and costly.


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