What is the difference between an AFP Code and a BSID Code?
This is a common question from Treasury staff either for their own understanding or to help them explain the difference (or what either one may be) to their Bank Relationship Rep/Manager.
On an EDI 822 file, you will usually see both an AFP and a BSID Code. I say "usually" because the standard does allow for a bank to send both or only one of the two so long as correct formatting rules are followed.
AFP Service Codes
Formerly called TMA (Treasury Management Association) Service Codes, an
AFP Code is a 6 digit code used to categorize and create an apples-to-apples comparison for bank service fees across various banks. Recently, the AFP developed Global AFP Codes which are 8 digit codes used to categorize and compare international bank services. Although the 6 digit domestic codes are still in wide use, we have seen some banks send global codes on Account Analysis files.
For an AFP Code, the first and second pair of digits denotes a classification with the last two digits further classifying the bank service within that group. Also, the code does allow for undefined services if a bank service does not fit any one category perfectly. However, shoving too many services into an undefined bucket is counterproductive. Once you become familiar with AFP Codes, you'll be able to at least identify a service grouping quickly from the first two digits.
An apples-to-apples comparison of one's bank services across different banks is only possible if the AFP Codes are mapped correctly. For example, if 3 Treasury Analysts are mapping 1 bank service they each may decide on 3 different AFP codes determining on opinion and/or expertise alone. Mapping of AFP Codes may be more of an art than a science but, when done as accurately as possible, it allows the account holder to analyze their bank service fees by category to determine many different things; level of activity, fee comparison, and/or number of undefined bank services which seem to fall through the cracks for reporting purposes.
BSID Code
A Bank Service Identification (BSID) Code is an alphanumeric bank proprietary code. Unlike the AFP, BSID codes are developed and assign to services by each individual bank so it does not offer an apples-to-apples comparison across banks but it does allow you to quickly identify a code when speaking with your bank rep about your bank fees.
For a BSID Code, it allows the most benefit to track individual bank service fee history overtime and its level of activity. BSID Codes do not require mapping since this is handled by the bank and sent through on the Account Analysis statement. What I have found is that the paper statement usually doesn't include the BSID code so they are more likely to appear on an EDI 822 Account Analysis statement.
Unlike AFP Codes, from the account holders perspective, there is no rhythm or reason to the assignment of BSID codes. As it relates to an EDI 822 file, BSID codes are supposed to remain static.
How does this relate?
Of course, an AFP code and/or a BSID code may be found on an EDI 822 file. Both classify bank services into comprehensible groupings to at least one party. Both assist in the analysis and reporting of bank service fees. And, both strive to make a bank service easy to identify with the Global AFP Codes opening the door to include international services as well. It seems no topic is ever too elementary to write about when we all have specialized knowledge in select areas.
Happy Analyzing!
