In our bank account management (BAM) blog series, we strive to look at the problems of bank account management from a modern perspective. Our first installment focused on proper bank account management practices in the risk-focused world.

In this installment, we will discuss using the account analysis or bank fee statements you receive from your banks as a monitoring tool for establishing effective account and transaction controls in your treasury operation.

What is bank account management?

Let’s start with a refresher of what has become the industry’s standard definition of bank account management:

Bank account management consists of the policies, procedures and actions taken to open, close or modify accounts held by a business with a financial institution. This includes the negotiation and management of account services and fees, mandates governing the account, authorized users of the account and methods of communication regarding these account activities. It also includes managing the interrelationships among accounts, regulatory reporting, and compliance.

Accepting the definition above brings to the forefront the fact that bank fee negotiation and management is actually a subset of the broader topic of BAM. We all know that a monthly review of bank fee statements will go a long way to help achieve savings. It is commonly accepted that between 7% and 10% of bank fees are billed in error every month. Holding banks accountable to the services and pricing agreed upon is a critical-level control that should be implemented in all companies.

In today’s fraud-ridden world, banks offer a number of services to help combat these risks. Services like debit block and filters, positive pay and IT security controls help to prevent the initiation of unauthorized transactions from our accounts. Additionally, there are even broader controls that can be implemented by simply using account analysis statements.

If you think about the fee statements you get from your banks, your first thought might be error checking or volume visibility. However, total visibility into those statements actually provides a great lens into some aspects of transaction-level controls that should be a part of your overall bank account management strategy. With accessibility to those statements and the right querying tools, a treasury professional can validate they have solid controls protecting their accounts from unauthorized transactions.

Below are some suggested queries for your bank fee statements:

  • Find any statement that has charges for disbursement items that does not have a charge for positive pay maintenance
  • Find any statement that does not have a charge for ACH Debit Block
  • For accounts that may allow for ACH debits, find any statement that does not have a charge for an ACH Debit Filter

There are many other possible fraud related controls you can put in place simply by detailed and continuous monitoring of your bank fees as a part of your bank account management system.

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