By Pieter Cronje, Head of Cash & Liquidity
Bank fees are a significant cost to most businesses, yet management of this cost is often neglected. Effective analysis of bank fees enables sound management, presenting opportunities for considerable cost savings, informed decision-making and even process improvements.
The tendency to avoid the management of bank fees is understandable when one considers the resources that this requires. The process starts with obtaining bank statement information and isolating the bank fee detail. From a practical perspective, this needs to be in an electronic and user-friendly format, which is often not the case in an African context. So too can volume add to the challenge; for large corporate groups, bank fee detail may exceed thousands of line items each month. The next step is to understand the fees charged – again potentially demanding depending on the availability of information and knowledge regarding each bank’s reporting methods. Understanding of entries then enables categorisation leading into analysis: by bank, by account, by entity, by month etc.
The process described above is best facilitated by robust systems and software, and depending on volumes, it can be practically impossible without these. Only once bank fees have been categorised and analysed, can a complete comparison be made between fees actually charged and fees that should be charged based on pricing as agreed with the bank. In doing so, fees billed incorrectly by the bank are identified for refund. Having the appropriate information at hand also empowers businesses for future fee negotiations.
The benefits of effective bank fee analysis extend beyond cost containment. The information revealed by the exercise facilitates the identification of suboptimal choices and enables informed investigation, design and implementation of improved processes. TreasuryONE has skilled specialists in the field of bank fee analysis, as well as the systems and software required to process volumes of underlying data.