Automation: taking a new look at bank statements.

• Author: Gilmore, Stacey
• Position: Treasury

The receipt of monthly account statements from commercial banks has historically been a nonevent for most corporations. Most financial executives considered these charges "common" monthly expenses warranting nothing more than a quick review for "reasonableness" before transmittal to accounts payable for processing.

But in today's business environment, such pro-forma reviews can prove to be costly, especially for treasury analysts and corporate cash managers operating under a mandate to cut expenses whenever and wherever possible.

Banks offer commercial customers a wide variety of services options to help keep cash-flow cycles short and lean. Corporate executives need to leverage these opportunities within their organization by matching bank services to specific internal processes.

The question then becomes: How can treasurers gain the power to leverage these options? The answer is: They already possess it. It lies in the review of monthly account analysis statements.

The first step in using their power is simple: Change the corporate attitude toward monthly account analysis review. Instead of viewing the statements as "bills," consider them as "analytical tools" that are capable of revealing the bank services most suited to corporate processes and minimizing their costs.

The second step follows the first: Automate the review process to maximize statements' value as an analytical tool. Most organizations possess many banking relationships and multiple accounts. Wading through stacks of monthly statements is a daunting process, and typically exceeds the capacity of staff to perform. Automation simplifies statement analysis, especially related to the list of detailed items.

Analysis reveals ways to decrease monthly expenses, create more favorable banking relationships and monitor internal procedures. In fact, knowing the service price per-item and total usage volumes--as well as the specific instances where bank services are used--uncovers a "gold mine" of information that pinpoints inefficiencies/errors originating either at the bank or in the organization.

The third step--transition to electronic statements--attests to the availability of bank data for mining. More than 90 percent of domestic banks offer monthly statements in an electronic format. Requesting electronic statements facilitates data import into a third-party application and increases the accuracy of the resulting analyses.

Even with a third-party solution and electronic data...