Carola Schmitz-Becker’s (VP Corporate Treasury, Deutsche Post DHL) presentation at the Eurofinance Conference in Barcelona in October, described their Project to ‘Create transparency in bank charges’. They started from the position of corporate treasury negotiating all bank charges for the group. They found when they started the project that there was no overview about products used, volumes and prices charged on the bank accounts of subsidiaries. Not only was this information not available, samples about volumes and pricing from banks showed that there were frequent mistakes and there was no central system in corporate treasury management and reporting of bank charges.
The objectives of the ‘Create transparency’ project were to ensure:
- the usage of standardised reports for internal automated processing: TWIST* BSB Standard, camt.086, EDI 822, XML, own defined Excel format
- preferred usage of AFP Codes or at minimum unique code for each product
- inclusion of product codes in the agreed prices lists
- all key banking partners used standardised reporting
- the selection of new banks will also depend on availability of regular standardised reporting (which will be included in RFP criteria).
Carola reported that they have installed new bank account management software and migrated their existing bank account database to the new system. They have found that there are significant difference in the technical abilities of the banks in their:
- billing platforms - consistency and reliability of delivered data
- data harmonisation with some banks have several descriptions and codes for same product
- delivery time of billing reports.
Deutsche Post also found considerable differences in the level of bank acceptance of the need to introduce new billing standards. The global banks were more responsive to include bank charge codes in their strategy. The status of the Transparency Project (as at September 2013) is shown in their Score Card for the 10 bank groups:
Source & Copyright©2013 - Deutsche Post DHL
This shows the huge differences in the quality and range of data. N.B. There are quite a few cells where the banks are rated as ‘useless’ which shows how much work these banks still have to do.
Carola feels that they have improved the quality of their bank account management by:
- achieving transparency about products and volumes used by the subsidiaries
- better controlling of charged prices and have had refunds of wrong pricing
- proving that automating the analysis of bank charges is possible
- developed a much better database for new RPFs and price negotiations.
External lobbying and need for support
Deutsche Post DHL believe that bank charges need to be standardised, and that the more corporate customers ask their banks for these services, the more the banks will invest in their billing IT systems and processes. So they have been having regular discussions with other multinational corporates on standardisation of bank billings (TWIST, camt.086),and organised the distribution of a petition in August 2013 to push development of such standardised bank billings. This petition was signed by 15 major german multi-national corporations and sent to 25 major banks. .
The next steps in Deutsche Post DHL’s campaign to get more commitment from the banks to adopt the global billing standards and improve their billing systems are to, 1) invite other corporates to support the petition, and 2) focus on development of e-invoicing by banks.
This is an important initiative and needs supporting. Corporates should sign the petition and get involved. Contact Carola at firstname.lastname@example.org or her colleague Christine Pitzen at email@example.com.
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