MT940 is the international standard of electronic account statements developed by S.W.I.F.T. The MT940 file format is typically used for end of day bank statement reporting in organisations right across Europe. Each file contains an opening and closing balance and details of any and all transactions which take place in between. SWIFT MT940 files have been a very welcome development in the world of cash management and cash application.
The limitations of the MT940 File Format
The SWIFT MT940 format has made a significant impact in standardising the exchange of information between financial institutions. However a clear disadvantage of the format is that there can be discrepancies and differences in the file information exchanged from country to country and bank to bank.
MT940 files contain a specific number of character fields which bear transaction details. The use of only a limited number of specific fields can cause your ERP system great difficulty in its ability to auto-match payments against invoices. Auto-match rates tend to be as low as 20-30% leaving a large quantity of files to be manually processed.
Getting your ERP to talk to your bank
To increase your auto-match rate and reduce a significant amount of time spent on MT940 processing, organisations require an MT940 software solution. Such intelligent cash application solutions provide the missing link between your banks and your ERP system(s). With the Cashbook MT940 software module, you achieve anything from 60-98% automation of daily transactions. How so?
1. Integration with any ERP
MT940 software has JDBC access to multiple ERP systems, be it SAP, Oracle, Baan, Lawson, BPCS, JD Edwards, XA, Microsoft Dynamics, Sage or any other ERP. The software can either directly integrate with system data and/or through a staging database.
Your organisation will no longer be confined to operating just one common ERP system across all departments and all locations. MT940 software can operate across multiple ERP’s and multiple departments, shared service centres and locations. Whatever your ERP system, the MT940 software module can be swiftly and seamlessly integrated.
2. Integration with other cash management solutions
Cashbook’s MT940 software integrates with our other cash management solutions such as our Bank Reconciliation, Lockbox processing, Draft Management, Direct Debits, Factoring, Customer Remittance automation from EDI, Excel and PDF files. The customer remittance integration helps to auto-match files for both high volume and low volume customers.
3. Caters for multiple banks & bank accounts
MT940 file automation software uploads and stores multiple bank accounts, bank statement and opening and closing balances. In catering for multiples banks and bank accounts, it can facilitate much greater matching capabilities.
The software can match data belonging to any global bank, country or currency and does so while meeting country specific privacy laws regarding handling of bank account information.
4. All payments handled
The MT940 software matching algorithms support customer account numbers, customer bank account numbers, invoices, sales orders, purchase orders, packing numbers, pick lists and shipment data. It can handle matching of all payment types including partial payments, credit notes, debit notes, discounts, unallocated cash payments, foreign exchange differences, write-offs and bank fees.
5. Transparent reporting
The software reports all automated cash application and manual cash matches enabling a more transparent view into MT940 file processing. The ability to get a clear insight into the exact status of each file enables more straight-forward, efficient manual processing of any files which were not auto-matched.
Streamline MT940 file processing
MT940 file processing can become much more streamlined when MT940 automation software is introduced into the equation. Your cash application team can reduce time spent on MT940 file processing by 50% or more. We know these figures as we track and log them.
That means a significant number of staff hours will be freed up for higher value work. You can finally achieve straight-through processing between ERP and banks.
What level of automation can you achieve?
Interested in learning just what level of MT940 processing automation your organisation could achieve? Request a demo of Cashbook’s innovative MT940 software and we’ll quickly come back to you.