Painless wire-transfer instructions

For many business users, composing wire-transfer instructions for transmitting funds to Canadian banks can be rather frustrating, because the banks themselves do not present the syntax in a way that can be converted to the internationally recognized SWIFT MT103 format. The templates I have seen do not even allow for fillable formats for on-screen entry and validation before printing and forwarding, let along ease of use for on-screen data entry such as is used in other countries. Here are some pointers that I have gathered which may be of use.

Scenario: transmission of CAD funds to a Canadian bank (details of beneficiary)

Bank	Canadian Imperial Bank of Commerce (010) (SWIFT CIBCCATT)
Transit (branch)	aaaaa
Account number	xx-xxxxx
Branch address	123 ANYWHERE ST ST JOHN'S, NL  A1A 1A1 CANADA
Beneficiary name and address	JOHN Q. DOE 456 ELSEWHERE AV ST JOHN'S, NL  A1A 1A2
Remittance information	Either description or reference - in this case, assume payment reference is 123456789
Responsibility for wire charges	Beneficiary (BEN)/Sender (OUR)/Shared (SHA) - in this case, assume BEN

The key fields will be laid out as follows:

Field tag	Field name	Format to be entered
:57A	Account with institution	SWIFT BIC: CIBCCATT //CC0010aaaaa
:59	Beneficiary	xx-xxxxx JOHN Q. DOE 456 ELSEWHERE AV ST JOHN'S, NL  A1A 1A2
:70	Remittance information	123456789
:71A	Details of charges	BEN

There are some possible variations:

• If the beneficiary has obtained his own SWIFT Business Entity Identifier, use tag :59A and enter the account number and BEI only.
• The beneficiary's bank may require the insertion of the branch's address as well, in which case use tag :57D

 I hope this clarifies matters for some users.

Tracking systems to make your work easier

One of the impacts of implementing ISO 9000 systems has been the necessity to be able to track issues from initiation to resolution, and changes to company documentation. There are too many instances, which I am familiar with, of organizations attempting to set these up from scratch. Such developments often have fuzzy goals, expenditures that seem to be out of control, inordinate wastes of time, and a failure rate that is all too high. And that's before updating and maintenance!


The above chart shows a bug lifecycle chart as implemented in Bugzilla, a rather good issue-tracking application that is really open-source software. It has great reviews, is very flexible, and is worth checking out.

For tracking of document changes, Subversion is a great open-source revision control application as well, which can be integrated with many other applications as well for tracking company documents, software documentation, and the like. 

Global Trade Management: do you need it?

Cross-border transactions require massive attention to detail. The following all contribute to this:

• product codes for purchased items need to be matched with the country of origin and be property identified under the Harmonized System
• product codes for manufactured items need to be analyzed to determine whether tariff shifts have taken place under applicable rules of origin
• trade parties (ie, customers, suppliers, carriers, customs brokers, freight forwarders and third-party logistics providers) need to prove compliance with applicable requirements, such as end use and end user for products, necessary registrations and certifications, and security-related information
• appropriate security arrangements (such as the US Customs-Trade Partnership Against Terrorism and the Canadian Partners in Protection) need to be in place in order to receive preferential clearance treatment through the various customs authorities
• economic sanctions, import/export/re-export controls and licensing requirements will require review to ensure that designated goods do not get shipped either to prohibited countries or for prohibited purposes, or to (or through) prohibited trade parties
• free trade agreements will require certificates of origin to be on file to prove that shipped goods qualify for preferential treatment
• duties, taxes and fees have to be properly matched to applicable product codes in line with the above
• accounting for activity that occurs in duty-free zones
• the matching of transactions with applicable letters of credit (where they are used)
• full documentation of the above, and how they have been applied to specific transactions, will need to be kept on file for future audit by the appropriate authorities

 This is a very daunting list, and many organizations still tend to still treat this as a manual operation, and that can be cumbersome. With most organizations operating ERP these days (and shame on those who still don't), it is a valid question as to whether that can be extended to handle the above through what is referred to as a Global Trade Management platform.

This is a decision that cannot be taken lightly. It is estimated that the software cost for such a move will be between 0.25-1 million dollars or more, and implementation costs will be 2-3 times that amount. The following vendors are currently promoting their own particular solutions:

• Oracle and SAP - naturally - are offering extensions for their own platforms
• Other vendors with broad-based offerings include Integration Point, Precision Software and Amber Road. There are others that appear to offer less comprehensive solutions.

If you are a reasonably complex enterprise operating in two or more countries or having extensive cross-border supplier and customer networks, these may be worth investigating. As always, be aware that most IT projects do fail for lack of proper cost-benefit analysis, lack of buy-in (a huge consideration in Canada), or improper training (a huge failing here as well).

Just how good is FOSS getting?

Microsoft, Apple, Adobe and the like do create excellent software, but the license fees that are required can be prohibitive for organizations of any scale. Fortunately, this last decade has seen significant developments in the FOSS (Free and Open Source Software) alternative.



For example, take the city of Munich in Germany. Rather than remain hostage to the Microsoft régime, it chose to go the Linux route, and has completed the migration of 15,000 of its 18,000 workstations to its own LiMux platform. It took ten years, but it appears to be worth it. Most of the documentation at their site is in German, but there is a lot to learn about what they did to standardize their development of documents and forms which can be seen here.

On a smaller scale, any organization can benefit from the software that is available now:

• For a standard office suite, check out OpenOffice or LibreOffice. They use the Open Document Format, but can import and export from Microsoft formats as well, and also export to PDF.
• For those that need to use a good desktop publishing application, Scribus is excellent and it exports to PDF as well. If you need the more extensive capabilities provided by LaTeX, give LyX a try.
• Mozilla Thunderbird is a great e-mail client, which is easily customizable.
• For those who work with graphics, GIMP and Inkscape are excellent choices, for raster and vector formats respectively.
• There is too much about Linux that can be summarized easily, but note that many server installations depend on one distribution or another, as opposed to Microsoft or one of the other proprietary vendors. The good people in IT are quite familiar with this.

I have only scratched the surface. This is a field that is worth checking out further.

Just follow the money

It's been a while since I've discussed the area of cash management, but it is one of the most crucial — and overlooked — areas in Canadian business.

A while back, I became a Controller at a mid-sized Canadian company that was somewhat deficient in that regard:

• deposits only went to the bank when the clerk felt like it, which consisted of a drive to the local branches of two different banks.
• everything stopped when one  manager or another (not just the President) demanded that a manual cheque be cut to pay an invoice he had sat on for over a month — and that was a regular occurrence!
• cheques would be written but not released, until a vendor called up to demand payment.
• bank reconciliations were done outside of the module provided by the accounting system then in place — and one bank account was discovered to be a mix of funds belonging to two separate companies!

There were other issues, but the above points really stood out. Needless to say, a major cleanup was in order:

• daily deposit runs were instituted, in order to minimize our interest costs.
• a US account was set up in order to tap into their ACH network.
• lockboxes were set up for customer payments to be routed into.
• we encouraged smaller orders to be settled by credit card in both CAD and USD, through Visa, MC and Amex (and we had to jump through hoops to set up Amex in USD!).
• we informed our customers of these arrangements, as well as giving them instructions for transmitting electronic funds transfers into these accounts.
• we set up online banking, in order to review our account transactions daily.
• we closed the two-company account, after dividing up the funds.
• reconciliations were caught up, and transactions were reviewed on a timely basis, so that the account recs could be done on the first working day of the following month!
• payables were settled on weekly cheque runs and sent out, using the accounting system's cheque issuing capabilities.

 All of these were easily instituted, and resulted in some significant benefits:

•  the number of cheques coming in through the mail dropped significantly and arrived less frequently, so less time was wasted in driving to the bank.
• the lockboxes allowed for funds to be credited to our accounts sooner (by 1-2 days for CAD payments, and by more than a week for USD, because the delays at Canada Post were eliminated).
• tapping into the ACH network allowed for large customers in the US to initiate direct deposits into our US account (Canadian banks, even if they put a US ABA routing number on your US cheque, are not part of this, because it is what they call a PARS number).
• getting the cheques to come off on regular runs eliminated data entry errors in the accounting system, and vendors felt more secure knowing that we were following a regular schedule.

The management there were reluctant to extend our cash management capabilities further, despite my efforts to encourage it, and that lack of imagination is one of the reasons the company is no longer in operation. What could we have done to make it better?

• expand electronic invoicing, in order to eliminate time spent in transit from suppliers and to customers.
• extending our direct deposit functions (already in place with payroll) to handle vendor payments as well, both in Canada and in the US. Other Canadian organizations, such as Ontario Power Generation, already offer this.
• transmit and receive remittance information electronically through EDI, ISO 20022 or otherwise, in order to accelerate posting to vendor and customer accounts.
• take advantage of other electronic debits available through the US ACH network.
• route wire transfers overseas through the US account, in order to take advantage of the online services available through US banks (which the Canadian banks really like to discourage, as well as overcharge).

There are some instances of companies elsewhere in the world that have set up an imaginative structure in order to really make their customer's payments be as painless as possible. One story about a photographic distributor in New Zealand, and its dealings with customers around the world, caught my eye recently, and how it was able to wean its customers off credit card payments because of the cost and risk of fraud.  Their explanation of how it's set up in order to assure trust in its transactions really does make sense in a specialized business operating on a worldwide scale, but it might not be appropriate if your operations are concentrated in one geographic area, such as North America or Europe.

Thoughts about what your office needs

It's been several years since I wrote about this, but there are several developments that have become quite significant:

• Tablets have become quite prevalent, and, together with laptops, requires the presence of wireless Internet gateways in the workplace. This is a trend that must be encouraged, and such connections must always be securely encrypted. I still believe that this should be supplemental to a secure cable network, in order to handle basic transactional data and ensure backup on the appropriate servers. There is lots of guidance as to how to implement this, and I suggest going to NIST to start investigating which configurations will work for you.
• The use of tablets, personal communications devices, digital cameras and the like have greatly increased the use of USB charging devices. It may be good practice to install these as wall outlets, in addition to surge-protective receptacles for your regular electronic equipment.
• It's been five years since schematic wiring diagrams became mandatory for commercial installations in Ontario under the Electrical Safety Code. Are yours up to date? Even if they are, is it time to revisit them, in order to arrange for the reduction of external wiring for your peripherals?
• Cloud applications are becoming quite user-friendly and powerful. Besides Google Apps, I readily recommend Box, Dropbox, Google Drive and Skydrive.
• If your office is of any great size, managed print services are a great option in order to minimize your fleet of printers and related paper usage and maintenance. There's are fair bit of competition out there, and some suppliers are more reputable than others.
• If you haven't implemented this yet, dual or triple monitors can really increase your productive output. Make sure, though, that your workspace can accommodate this without being crowded out by all the monitors. You still need to be able to make eye contact with your visitors!

"Anything that does not add value is waste."

That is one of the maxims I learned from a fellow CMA who was my boss at a subsidiary of Noma Industries Limited (a fascinating public company that no longer exists). It's amazing how many organizations take issue with that statement!

The fellow was bright, having been awarded the Board of Governors Medal by the Society of Management Accountants of Canada (now CMA Canada), for attaining the highest mark nationwide for writing his final exam before qualification. Here are some other frighteningly accurate observations of his, that have stood the test of time:

• "Once you have the answer, it becomes very easy to frame the question."
• "If it looks wrong, it probably is." (That's the converse of an old engineering phrase.)
• "If it can be written down logically on a piece of paper, it can be programmed."

I hear he's now retired. The business world has thereby lost a most interesting character.