Fix Low MT940 Auto Matching
Europe is ahead of the United States in acceptance of electronic banking. One of the key drivers of this acceptance is the S.W.I.F.T. (Society for Worldwide Interbank Financial Communications) co-operative that was established to standardize the exchange of messages between financial institutions via its own telecommunications network.
The downside of the SWIFT MT940 standard is that the information conveyed can vary from country to country and bank to bank. The format specifies a very limited number of character fields to convey transaction details, which will limit your ERP system ability to automatically post payments against their matching invoices. The combination of regional differences and lack of remittance details can result in auto match rates that are often as low as the 20 to 30% range.
Adding to the frustration is that these same international companies quite often achieve 75 plus percent cash application automation while processing against BAI2 files based on lockbox paper checks and remittance advice.
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