MT940

MT940 is a standardized electronic bank statement format developed by SWIFT to deliver detailed transaction information efficiently. It provides a structured, machine-readable layout that includes debits, credits, opening and closing balances, and other key transaction details. This structure makes it ideal for automated reconciliation and streamlined cash management.

Companies across Europe commonly use the MT940 file as a standard bank statement format. SWIFT, the Society for Worldwide Interbank Financial Telecommunication, was created by European bankers to enable secure, reliable interbank communication and fund transfers. Each SWIFT message follows a predefined category, called an MT number, to ensure consistency and clarity.

At the end of each day or reporting period, the bank generates an MT940 file for the corporate account. Then, the bank transmits this file securely through SWIFT, SFTP, or other communication channels. Once received, the company’s treasury, ERP, or cash management system imports the MT940 file for automatic reconciliation against internal ledgers. The system matches transactions to invoices, payments, or other accounting entries and flags any discrepancies for review.

Companies widely use MT940 for bank reconciliation, automating how they compare bank transactions with the general ledger or subledgers. It also supports cash management and forecasting by providing real-time visibility into account balances and cash positions.

In accounts receivable and payable, MT940 helps allocate incoming and outgoing payments accurately, reducing errors and delays. Additionally, it plays a key role in treasury operations by supporting liquidity monitoring, cash concentration, and intercompany fund tracking.

MT940 offers several key benefits for businesses. It is automation-friendly, enabling straight-through processing of bank statement data without manual intervention. The format improves accuracy by reducing manual data entry and minimizing errors in reconciliation.

It also provides detailed reporting, including all transactions, balances, and references required for accounting and auditing purposes. Additionally, MT940 integrates seamlessly with ERP, treasury management, and cash application systems, making it a powerful tool for efficient financial operations.

MT940 is particularly useful for corporates with high transaction volumes or multinational operations, as it streamlines bank reconciliation, cash visibility, and payment tracking, enabling more efficient treasury and finance operations.

MT940 also has some limitations. Only banks that provide MT940 files can support its use, so companies must work with these institutions. Implementing MT940 demands technical setup, as ERP or treasury systems must be capable of parsing and processing the data.

Although widely used in Europe and beyond, banks sometimes apply slight regional variations, requiring companies to adjust for consistent processing.

Cashbook offers an integrated MT940 solution, allowing companies to upload bank statements directly. Its algorithms automatically match cash receipts and manual payments to customer invoices. As a result, the software can automate between 60% and 98% of daily cash transactions, saving time and reducing errors.

Requesting a demo Cashbook allows you to see the software in action and understand how it can transform your financial processes. The demo highlights features such as cash application, bank reconciliation, accounts payable automation, and real-time cash flow visibility. During a short discovery call, we identify your specific pain points and financial processes that could benefit from automation. The demo is then tailored to your needs, showing how Cashbook integrates with your ERP, improves efficiency, reduces manual errors, and enables your team to focus on higher-value work.