Keyword Search: EDI 822 Sample File

Regularly, I like to check which keywords brought someone to my blog or to a specific post.  From these keyword searches I can get an idea of which questions people desire answers to.  The #1 keyword search (thus far) has been "822 file".

These are variations of this internet keyword search that I've seen:

• EDI 822 Account Analysis
• 822 Statement
• X12 822
• 822 File
• What is An 822
• Account Analysis Statement
• 822 Sample File

I guess it's no surprise that of my 12 blog posts (thus far) the one with the most hits has been ANSI X12 EDI 822 with a 265 view count.  Considering that was my 1st blog post almost 9 months ago I think I should probably focus more on this topic since there may be a demand for the knowledge.

The Bad

Unfortunately, there isn't much I can discuss or explain without giving away most of the formatting rules and correct ways to construct an EDI 822 file.  Of course there are many basics on the internet but the heart of the different versions of the 822 file can't be disclosed or else little ole me will be in deep trouble!

The Good

Fortunately, the guide is available for sale from the AFP (not a sales pitch).  Of course, I know most banks have their own 822 implementation guide which they follow and sample 822 file which they distribute to their employees/contractors.  However, this has only allowed people like myself to easily distinguish one bad file from another.

The Myths

1. How a bank decides to format their EDI 822 file is correct.  It most definitely is not correct and I wish more receivers of these 822 files would demand the correct format instead of accepting the explanations given as final.  Also, anything "bank-specific" is contrary to the definition of "industry standard".  
2. Knowing how each bank sends its EDI 822 file is important.  Knowing how and what data your bank sends on the EDI 822 file is important.  Also, knowing how it should be sent can be important whether you have an Account Analysis software program or not.  This info is important to know for you, the Treasury dept, who pays the bank fees each period.
3. The bank's EDI department is staffed with EDI 822 experts.  Due to my experiences, I have lowered my expectations because I've spent more time explaining basics to the very people who ought to know since they are the ones in charge of formatting decisions and its execution.  Always strive to know more than to put your trust in someone else.

It is good that people seek knowledge and answers to something which they do not have a thorough understanding.  So, I will continue to use those keyword searches to write something more informative to assist as best I can without crossing any lines.  Also, any 822 file questions I receive I will attempt to address directly.

Happy Analyzing!

Q&A: What is an 822 File?

When I thought to write Q&A posts I assumed I'd run out of questions to answer but, from outside the field, very few Bankers or Treasurers understand Account Analysis so it has given me more to write about and - hopefully - this space remains informative.

What is an 822 file?

An 822 file is an EDI (Electronic Data Interchange) transmission of a bank account statement; account balances, service activity, charges, service fees, applicable rates, adjustments, etc.  Also included is basic information such as the bank itself, its routing and transit number, the company/account holder, account names, account numbers, classification of account levels and various service and charge classifications.  The vast majority of bank account holders receive a paper and/or EDI 822 file monthly.

Which financial institutions can produce an 822 file?

Most of the big banks can produce an 822 file and a couple does so very well as far as adhering to the standard format.

A common misconception is that the 822 file shall always match the paper statement.  In theory, the same data should be translated from common layman's terms and dollar amounts found on the paper statement to an EDI format without altering the data itself.  In the event this does not happen, it is likely the EDI language is not understood and/or its format was not followed.

EDI is a terminology/format that is not as common as I'd originally thought.  For example, if they place the word "CREDIT" in any segment on the 822 file it will not read as "CREDIT" in EDI terminology. To communicate successfully, those responsible for the construction of the EDI 822 file must be fluent in the EDI 822 terminology and standard.

Without a good understanding, your file may be called an 822 but it's really just an alphanumeric file with special characters that Person A believes translates into something that Person B cannot comprehend.

Happy Analyzing!

TWIST BSB and ISO BSB

Things are going international.  Or, things have gone international.  Actually, things have always been international but certain someones are late to the party.

When I began my career in Account Analysis, I familiarized myself with the ANSI X12 EDI 822 file; the domestic account analysis statement.  I learned the different versions of the 822; the various segments a bank can send; each position of those segments; how to read and interpret its data; and how to reformat or make minor corrections to the file, if needed.  I like to think I became an expert then along came the BSB and I realized something; you're only an expert until something new falls on your desk.

The TWIST BSB.  What is TWIST?

The Transaction Workflow Innovation Standards Team (TWIST) is a not-for-profit industry group with representatives from several key constituents.

What is a BSB? A Bank Service Billing (BSB) is a standard digital file for bank billing of primarily international services. 

As I stated earlier, the 822 file is for domestic use while the BSB is for international use accommodating various currencies, taxes, and utilizing international bank and account field codes.

Now, the ISO 20022 BSB is the new new. 

What is ISO? 

Industry Organization for Standardization.  Wait, that's IOS not ISO. I know...it confused me too in the beginning but I just rolled with it.

Here you can find more information about the ISO 20022 (camt.086) which is a "standardization approach used by all financial standards and initiatives".  I haven't gotten my hands on an actual ISO BSB yet since most financial institutions are still trying to create a good one....but, I'm sure I will very soon.  From my experience, having to correct a  file is the best way to learn about its components.

So, what's the difference between an 822 and a BSB file?

For starters, taxes usually aren't sent on an 822 file but they are definitely formatted to be sent in the TWIST BSB and also the ISO BSB.

There are a lot more currency types found in a BSB file than in an 822 file.

The formatting of data will look different and have different tag names between the 822 and BSB.

822 files are usually sent with an .822, .txt, doc, or .docx extension.  BSB files are sent with an .xml extension.

There's way more to it than that but the point was to explain the high-level differences and define each.

With the new ISO BSB, AFP Global Codes, and the slow but positive embrace of international accounting practices along with creating a standard for international treasury and account analysis, I foresee good things ahead.

Until then, happy analyzing!

What are Analyzed Charges?

From my experience, banks send service charges one of four ways: analyzed, hard, waived, or debited.  Usually, most bank services are sent as analyzed charges on an account analysis statement but what does this mean?

Analyzed means the charge for this bank service can be offset by any earnings allowance the account has earned for the period.

If your account's total analyzed charges for the month is $343.23 but your earnings allowance is $51.84 then that means you should owe the bank an amount of $343.23 less $51.84.

Analyzed Charges are sent on an account analysis statement as Service Charges - Balance Compensable.  All analyzed charges for one account during a particular time frame should be shown as this balance.  This balance is always a positive number but does not include any adjustments.  It is pre-adjustments, if applicable.

Why are Analyzed Charges important to know for Account Analysis?

First, most Treasurers' job responsibility is to lower costs namely those of bank fees.  If the cost of bank services at one bank makes the earnings allowance worth it since this earnings allowance can be applied towards total analyzed charges, then why would this charge NOT be important?

Since the Great Recession, we have seen Earned Credit Rates (ECR) plummet to barely anything worth mentioning.  Due to this lowered rate, balances kept in accounts are often not worth the charges incurred for the bank services.

Since the ECR determines the amount of earnings allowance which in turn determines how much money a company can save on their bank fees, this can help better estimate how much fees to incur per account to offset those fees against your estimated earnings allowance.

Why spend more than you have to??

Now, there are different suggestions to consider which can eliminate certain bank fees or even get you better rates for those bank services but that's another topic...and totally strategic.

Until then...Happy Analyzing!

ANSI X12 EDI 822

For commercial domestic (US) account analysis, most companies receive what is called an ANSI X12 EDI 822 file from their financial institution(s).

What is ANSI X12?  ANSI stands for the American National Standards Institute.  X12 is a standard transaction set used mostly in North America.  Its format consists of loops, delimiters, and segment terminators.  Various sections of an ANSI X12 file have their own "label" such as the ISA/ISE, the GS/GE, or the ST/SE envelopes.  The "/" for each relationship indicates a header/trailer grouping. 

So, for an 822 file, the ISA envelope heads the file while the IEA envelope trails it.  The same goes for GS/GE and ST/SE.  I've had success keeping the headers and trailers straight by remembering the "E" trails; since ISE, GE, and SE all have the letter "E" while ISA, GS, and ST do not. 

Lastly, EDI means Electronic Data Interchange; an electronic format of what would otherwise be a paper statement. I like to highlight the first letter of each word in an acronym so I can visually see how the acronym came about. I've come across many an acronym where I've thought to myself, "Really?! That's the best you guys could come up with from this??"

The 822 is one of many transaction sets available but the only one used specifically for account analysis.

Commercial Account Analysis = ANSI X12 EDI 822.

An 822 file is usually delivered in a .txt, doc, .docx, or .822 format.  From my time in account analysis, I've only worked with two versions of the 822 file; the 3040 and the 4010.  There may be versions prior to the 3040 and there may be versions after the 4010.  I don't concern myself with it until it falls on my desk or in my inbox. 

In an 822 file, the company should receive information about their account balances, service charges, bank fees, adjustments/credits, rates, as well as any earned credit in the form of an earnings allowance.  Some of this information falls between the header/trailer envelopes and are preceded by account records. 

The segments denoting an account usually include the account name, account number, and account level.  Following an account segment, you should see charges and compensations for the balances of that particular account followed next by specific service activity information for this account.   Know that each new account segment begins an account record so the presence of the next account segment signifies the end of the previous record.

In addition to the company's breakdown of fees and charges, one can also find other information such as the date when the file was produced, the time period for which the data of the file relates, the bank's routing transit number (RTN), the bank's location, etc.  This information is usually found at the beginning of the file following the header/trailer envelopes.  If there is more than one bank RTN present in the 822 file, there should be a separate ISA/ISE envelope indicating that the first file has ended and a new file with data relating to a different RTN is beginning. 

Contrary to what it appears, there is an order to the data which can easily be seen by "unwrapping" the 822 file.  Most, but not all, EDI 822 files are delivered "wrapped" which means it consists of one continuous string of data that is not separated by any identifiable break point. However, if you "unwrap" an 822 file you can easily identify the header/trailer envelopes as well as the data itself.

To "unwrap" means to break up the one continuous string of data and place each individual segment at the start of its own line in the file. This allows you to read it from left to right in some kind of order. The steps I've learned to unwrap an 822 file are found using Microsoft Word. 

1. Ctrl A
2. Ctrl H
3. Type ^p in the Find what field, leave the Replace with field blank, and then select Replace All.
4. Type the file's segment terminator in the Find what field. Then, type the file's segment terminator and ^p (no space) into the Replace with field.  Select Replace All. 

Step 1: this highlights the entire document.

Step 2: this opens the "Find and Replace" feature in MS Word.

Step 3: for this step, leave the "Replace" field blank. After you select "Replace All"   you will get a pop-up window telling you the number of rows affected and if you want to continue the same for the entire document.

Step 4: the segment terminator literally terminators the segment. It's like a period in a regular everyday sentence; the end of a statement, thought, phrase, etc. Most segment terminators are "\" or "~". For untrained eyes, finding it is the issue.  So, for this step, your Replace with field may look like this: ~^p

Once complete, you should be able to read the 822 file from left to right per line. If you cannot, you did something wrong so try again.

Happy Analyzing!