secrets to reconciling bank statements globally

Secrets to Reconciling Bank Statements

Globally

Karen WillisPartner - Elire

Christopher WieghausDirector Treasury Operations

Marsh & McLennan Companies

Michael LeyviHead of Corporate Systems

FIS – Marsh & McLennan Companies

• Industry leader of ERP Treasury

• 200+ implementations

• Consultants with 20+ years experience

• Advisor to ERP Treasury vendors

• Published in Treasury, FP&A space

• SWIFT Ready Consultancy 2007

About

• Headquartered in New York

• Marsh & McLennan Companies is a global professional services firm providing advice and solutions in the areas of risk, strategy, and human capital. It is the parent company of a number of the world’s leading risk experts and specialty consultants

• Approximately 60,000 colleagues worldwide

• Annual revenue of $13B

• Operate in more than 130 countries.

• Currently serve 75% of Fortune 1000 companies.

Marsh & McLennan Companies Four Operating Companies in Two Segments; Risk & Insurance Services & Consulting

Marsh & McLennan Companies Four Operating Companies in Two Segments; Risk & Insurance Services & Consulting

Insurance broking andrisk management

Talent, health, retirement and investments

Management consulting, economic analysis and brand consulting

$ 6.0B30,000+ Colleagues130 Countries

$ 1.1B2,300+ Colleagues50 Offices Worldwide

$ 4.4B21,000+ Colleagues43 Countries

$ 1.8B4,000+ Colleagues50+ offices 26 Countries

Reinsurance and intermediaryadvisory services

Capital Markets

New York London

Pensions

Treasury Operations(US & International)

• Cash Management & Investment• Bank Admin & Treasury Systems• International Finance Support

Treasury Operations(UK & EMEA)

• Cash Management & Investment• Operations

MMC Treasurer

Marsh & McLennan Companies Treasury Organization

Treasury Application OverviewImplemented PeopleSoft in 2004 , Continued Enhancement

Automated Bank Reconciliation ProjectNew Finance Transformation projects allowed for new functionality

• Currently maintain over 3,000 bank accounts globally to support our 4 lines of business

• Implemented new Fiduciary Systems for our Marsh operation in 2013

– New system allowed for reduction of 1,000 bank accounts, but concentrated activity

– Allowed for initial development of Auto Bank Reconciliation for US accounts

• In 2014, began multi year Global roll-out project encompassing replacement of Accounting systems (AP, AR, GL, AGIS) with latest Oracle EBS suite version

– Allowed for rationalization of global Corporate bank structure by region

– Capitalized on new ISO-20022 SWIFT payment file formats

– Continued roll out of Auto Bank Reconciliation functionality for global Corporate bank accounts

• Ability to automatically reconcile high

transaction volume accounts

• Optimize Book-to-Bank (BTB) reconciliation

close times

• Maximize STP automation

• Streamline Recon Exceptions

Project Goals & Objectives

• 58% of U.S. companies rely on manual reconciliation of general ledger accounts

• 92% of U.S. companies indicated their organization reconciles 500 accounts or fewer at least quarterly

• 64% of U.S. companies report they are reconciling fewer than 100 accounts at least quarterly

(Robert Half/FERF – “Benchmarking the Accounting & Finance Function” 2017)

Industry Benchmarks

Regional Reconciliation Center

Project Footprint

• NAM – Canada, USA

• LATAM - Argentina, Brazil, Chile, Colombia,

Mexico, Panama, Peru, Puerto Rico, Uruguay

• APAC - Australia, Japan, Korea, Hong Kong,

Macau, Malaysia, New Zealand, Philippines,

Singapore

Countries In Scope

• EMEA / CEE - Austria, Belgium, Bulgaria,

Croatia, Czech Republic, Denmark, Estonia,

Finland, France, Germany, Great Britain,

Hungary, Ireland, Italy, Latvia, Lithuania,

Luxemburg, Netherland, Norway, Poland,

Portugal, Romania, Serbia, Slovakia, South

Africa, Spain, Sweden, Switzerland, Turkey

Countries In Scope

Key Process Components

Automatic Bank Reconciliation

Automatic Bank Statement Accounting

Automatic Book-to-Bank Reconciliation

Project Banking Scope

• 3 Operating Units

• 5 Major Banks

• 800 Accounts

• 500 Corporate…300 Fiduciary

• AP Accounts, AR Accounts, POBO Accounts

• Checks, ACH, EFT, Wires, Lockbox Receipts

Project Team Structure

Project Methodology

Plan Evaluate Design Construct Test Implement

Project Plan – Phase I

Project Plan – Phase IIPhases 2 Weeks 1 Month 2 Months 1 Month 1 Month

Implement Pilot

Cut-Over Strategy

GO-LIVE

Phased Testing of Business Requirements



Training Strategy

Training Documents

Help Desk and Support Strategy

Pilot Production Post Go-Live Support

Phase 1

Validate source systems interfaces

Configure static data updates

Data conversion from legacy systems

Testing

User training

Security updates

Cutover/Deploy

Phase 2



Data conversion from legacy systems

Testing

User training

Security updates

Cutover/Deploy



BAM Considerations

• Take global inventory of Banks & Accounts (ABAs, BICs, IBANs)

• Identify corporate entities in scope

• Identify regions/countries in scope

• Unique business calendars

BAM Considerations

• Centralized function at Corp US or decentralized in

Region/Country?

• Global rules vs local requirements

• Account security authorizations

Interface Impacts

• Bank Accounts/Statements must be prepped and

ready

• General Ledger Interfaces were needed from Oracle

EBS FAH to PeopleSoft BTB tool

• Transaction detail data (i.e., deposits in transit) from

any external sources

Interface Impacts

• Relevant reference IDs for recon

• Data maps/transformations

• Payment methods—Check, EFT, Wire

• File layouts—ISO,SWIFT, EDI, ACH

• Is settlement netting in use?

ERP System Support for Initiative

SWIFT Bank Statement Messaging

Bank Statement Recon Process

Bank Stmt Recon Options

Bank Recon Prerequisites

• Assign a reconciliation method to each account—

automatic / semi / manual

• Set reconciliation tolerances (amount / days) for

automatic reconciliation

• Upload statements or enter bank statement manually

Bank Recon Considerations

• Optimize reconciliation exception process

• Detail vs. summary on bank statements

• Bank statements vs. sub-system/module

• Paid Check / Lockbox Reports

Bank Recon Considerations

• Implement “smart reference IDs”

• Batch references for matching/recon

• Automatically categorize transactions using

matching rules

• Eliminate duplicate recon duties

Bank Statement STP Accounting

Bank Statements Accounting Considerations

• BSAC maximizes benefit to organization

• Greatly streamlines the recon process

• Follows after automatic reconciliation

• Highly efficient…up to 95% STP for exceptions

• Only as good as the rules created

• Continually add rules over time

BSAC Recon Rules

BSAC Accounting is STP

Book to Bank (BTB) Flow

BTB Considerations

• Do not define bank account number more than

once—this causes significant recon conflicts

• Bank accounts must have “clean” mapping to GL

entity/GL account… duplicates should not be

present

• Stage GL journals properly by running edit/post

process before BTB

BTB System Technology

Multi-currency Considerations

• Scope of multicurrency usage for each banking

partner

• Local currency reporting vs. corporate need for

information in USD

• Pooling of multiple currencies

• Revaluation methodologies used

• Forms of multicurrency settlements

Global Recon Reporting Considerations

• Current reporting tools available

• Current report library

• Future state desired reporting

• Need for additional new tools?

• Need for “what if” scenarios?

Global Recon Reporting Tools

Global Reconciliation Internal Controls

• Assessment of Treasury Management internal

controls (i.e., BAM)

• Provide documentation and procedures to meet SOX

requirements

• Disaster Recovery/Business Continuity Planning

should be in place

Contact Details

• [email protected]



Thank You!