Integrating with your bank to enable direct communications between your treasury platform and their internal infrastructure comes with considerable benefits. Not only is your business able to save its accounting team significant time and manual work, but direct bank communications can also help bolster data security and your ability to further automate.
However, setting up integrated communications with your banking service providers takes some time, consideration and planning. It's important to ensure that all the moving parts are in place and that configurations are completely accurate.
Why integrate with your bank?
Before we examine what businesses need to ask their banking partners, it's important to understand the advantages of supporting direct communication of this nature.
In the past — and still today — many enterprises used manual processes to transfer data to and from their bank. This includes manual uploads and downloads of critical files containing sensitive data, being passed back and forth between the company and the bank. And while this strategy may have sufficed in the past, it can open enterprises up to considerable security risks. What's more, the internal finance and accounting teams engaging in these manual processes waste significant time on these tasks which could be better spent on more valuable and strategic accounting work.
The solution here is to leverage technology like SK Global's Bank Communications Hub, which supports the kind of robust, uninterrupted integration between enterprise Dynamics ERP solutions and the bank. Additionally, this type of advanced technology can also support time and money-saving automation, including for the reconciliation process, transaction matching, mapping capabilities and more.
What do I need to ask my bank?
First and foremost, it's important that accounting and finance stakeholders spearheading the integration process understand how to guide the initiative and collaborate with their banking partners. To that end, there are some key questions to ask to help ensure a successful integration:
Who at the bank should we speak with?
In order to start the project off on the right foot, enterprise stakeholders should first connect with an account manager at their bank. This account manager can discuss the types of services the business will need in place with the bank in order to support direct communications. These might include bank services like eSettlement, direct debit capabilities or other functions.
Businesses will then connect with an onboarding or integration specialist at the bank, as well as a technology officer to help further their progress. These individuals can help the business work through the necessary technical and functional aspects required to support direct communications. And, once the integration is configured, the technical officer or onboarding specialist can help with testing to ensure that files are sent and received correctly.
What file formats will be required?
To make sure that files are transmitted correctly, it's key that the business uses the right file formats to support different payment or transaction types. This might include specific formats for:
- Bank reconciliation: Many banks use a similar file format for reconciliation, but these might change according to where the bank is based. Domestic American banks often use the common BAI2 file format, but international banks will typically require a different format.
- Outbound vendor payments: Configuring direct bank communication to support outbound vendor payments is typically the most complex part of the banking integration process. It's common for businesses and banks to use the U.S. ACH file format for these outbound vendor payments, but if these are wire transactions, they will require a different format. Again, the format will also depend on the destination country where the payment is being sent.
- Inbound files: It's also key to leverage the correct format for files coming from the bank to the businesses Dynamics platform. Many of these will require the ISO PSR file type.
A partner like SK Global can support any file format required to enable direct bank communications. In addition to the more than 500 banking formats accessible through the SK Global Treasury Suite library, our developers can also build any new format, if needed.
What is the timing for communications?
It's also critical to ask banking partners about the type of timing the business can expect when it comes to integrated, direct communications. Timing of files — particularly inbound files — can have considerable impacts on the business's internal banking processes, especially when posting transactions to the company's payment journals. So it's key that stakeholders have an understanding of just how long it will take the bank to respond.
Partnering with an expert
Overall, the process to support direct communication with the bank can be complex. To reap the benefits that integration with the bank can provide, it's imperative that communications and the supporting technology are configured directly.
A partner like SK Global can help guide this process and speak to your banking partners to ensure a smooth integration. SK Global has the expertise and experience to ask the right questions and to streamline the process to ensure success.
To find out more, check out some details of our Bank Communications Hub, and reach out to us to discuss or schedule a demo today.