What messaging standard(s) should I use?

There are three considerations. First, what standard does your treasury workstation vendor prefer? Increasingly vendors are adopting the newer ISO 20022 XML standard. Some treasury vendors support a mix of messaging standards including BAI2, EDIFACT, EDI, SWIFT FIN and SAP IDOC messages. While your treasury vendor may be flexible, your financial institution may not be. An important secondary consideration is what standards your banks support. If your primary cash management banks cannot send or receive ISO 20022 XML then you may want to stick with EDI or traditional SWIFT FIN messages.

The issue of standards may become less of an issue if you have access to a strong team of integration experts. Therefore, an important third consideration is what proficiencies your internal IT organization has. Many larger companies have partnered with a “B2B Managed Services” vendor that staffs hundreds of mapping and integration experts. These Managed Services vendors can quickly and cost effectively transform data from one format to another. Other companies provide similar services in-house with “Integration Competency Centers.” Using one of these two approaches, the issue of standards can often be effectively neutralized, eliminating manual intervention in payment initiation, receivables posting, bank reconciliations, and cash forecasting.

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