AFP’s Message to Banks: E-Invoicer, E-Invoice Thyself

The Association for Financial Professionals challenges commercial banks to provide consistent invoices using standardized service codes.

Banks have been avid proponents of electronic invoice payment and presentment. But recalcitrant suppliers sometimes balk at providing invoice information in a consistent, machine-readable format.

Now it's the banks' turn to settle into standards.

The Association for Financial Professionals (AFP), a Bethesda, Md.-based trade organization serving corporate treasurers, has created a certification program to ensure the proper use of its AFP Service Codes by commercial banks.

Corporations use service codes to generate "Bank Analysis Statements" that can describe an entire commercial banking relationship, in full. These Bank Analysis Statements report balance amounts, compensatory earnings credits and fee offsets. Also, it gives a corporate treasurer an opportunity to take a line-item approach to examining the cost of each particular service, should a bank desire to provide information to that level of detail.

Indeed, the AFP doesn't stipulate whether or not a bank can or should bundle related services together. "We have codes in there that reflect bundled services and also codes that get very granular," says Jeff Glenzer, director of treasury services for the AFP. "If one bank wants to bundle all its lockbox services into one charge, we don't comment on the merits of that pricing strategy."

"If another bank wants to price each sub-service within the wholesale lockbox function, we have service codes to identify that as well," says Glenzer. "But we want to make sure it's properly identified."

However, the service codes have defined limits. While a service code may describe the delivery channel of a particular service, it makes no claim to assess quality. So if two banks provide Internet-based balance reporting, it's the same code regardless of whether one site is faster, more resilient or more secure.

To ensure consistency of usage, AFP will examine a bank's menu of service codes as part of its new accreditation program. "The banks who become accredited will essentially have a 'seal of approval' to demonstrate their commitment to help their customers," says Glenzer.

Corporations can realize significant benefits from having coded invoices for banking services. "The more that we can increase standardization and identify balances and charges, the more of an opportunity there will be to automate the account analysis process," says Glenzer.

But adoption of the AFP service codes requires technology on both sides. "A lot of the back-office system providers to banks support the AFP service codes," says Glenzer. "They can accommodate the codes, if a bank wants to offer them to their corporate customers."

From the service codes, corporations can realize savings in labor costs, as well as other savings opportunties. For example, a company might find that it has 20 accounts across multiple banks where two would suffice.

The service codes may also help companies to comparison shop. "If you use your codes properly, it really facilitates an apples-to-apples comparison across multiple financial institution relationships," says Glenzer. "Both sides of the transaction can win."