BSB Currency Types

The Bank Services Billing (BSB) is the international Account Analysis file which allows for various currencies.  Most companies have been receiving the BSB for some time now but do we really understand what each currency type tells us?

Below are 4 currency types you will see in a BSB file (their actual tag names may differ) along with some example balances.

• Account Currency - the currency in which the final account balances are denominated.
• Ledger Balance
• Float Balance
• Net Collected Balance
• Balance Subject to Reserves
• Investable Balance
• Etc.

• Price Currency - the currency in which the account's services are priced.  
• Settlement Currency - the currency in which the account's final bank fees are denominated and due. 
• Services Charges - Balance Compensable
• Service Charges - Balance Non Compensable
• Service Charges Net Due This Statement
• Total Service Charges Invoiced 
• Etc.
• Host Currency - the currency in which the account's taxes are due.

Most are already familiar with the account currency which usually ties to the home country's currency in which the account resides.  All the above currency types are important but since most Treasurers are more interested in what they owe, this makes the Settlement Currency very important.  Without it, it may be difficult to determine in which currency your final fees are due and how much is due.  

Important to Note:

• All 4 currencies may not be denominated in the same currency. Usually, there are 1-2 currencies per account statement but this may not always be the case.  
• The Account Analysis file must include a conversion rate.  This conversion rate is sent by the bank letting you, the Treasury staff, know what rate was used to convert one currency into its final settlement currency.  
• There is a Settlement Currency for both the Compensation Balances and each individual Service Charge.  You may see a Settlement Charge for your services in one currency which should align with the Settlement Currency of your total service charges due.  
• For individual bank services, Price Currency and Settlement Currency are different.  The currency in which your bank services are priced may be different from the charge in which your bank service fees are due.  
• Although Host Currency does exist I haven't seen many banks send tax information on their files.

FAQs:

1. Now that my bank sends a BSB, how do I make sense of its data?  
• Capturing and processing the data using some form of an Account Analysis system is the best approach.  It will allow you to easily read the BSB data, see your account balances, check service activity, and a host of other things. 
2. Most of our accounts settle in various currencies, how do I convert them into a single currency for reporting?  
• The bank should always send a conversion rate when the Settlement Currency differs from the Price and/or Account Currency.  This allows you to audit your bank fees due.  Your Account Analysis system or manual calculations using an applicable conversion rate according to an as of date will allow you to convert your multiple currencies into one for reporting.  
3. We receive the TWIST BSB; will the data differ when we begin receiving the ISO BSB?
• No. The tag names or formatting of the file may differ but your Account Analysis system should already be ISO BSB or camt.086 message ready.  The same data points will be sent so there are no major differences or changes your Treasury Dept should make to their process(es).  

This subject matter may not concern many companies whose accounts are all domestic but for the others, there were enough questions to make the post worthwhile.

Happy Analyzing!