(Ed. Note: Updated 4/17/18)
Manual FBAR reporting is a time-consuming and detail-driven process that can take several weeks to months. As a result, many corporate treasury departments are implementing BAM or eBAM systems to automate the process of gathering, validating, and reporting data for FBAR. Some systems are able to generate FinCen Form 114 (FBAR report). Or, they are leveraging their ERP systems and banking systems more fully to perform the reporting.
CB&I experienced significant growth through a large acquisition/merger resulting in a large number of banks and accounts on which to report. CB&I’s treasury focused on three primary objectives:
- Bank account management and maintenance
- Development of a daily snapshot of global consolidated cash balances
- FBAR compilation, validation and distribution to the IRS.
To achieve these, the company looked for a connectivity solution for both its banks and users worldwide. CB&I considered continuing with an in-house solution, leveraging its treasury workstation or going to a customized third-party solution.
After review, CB&I selected a third-party solution that was able to maintain an account database, using account information to prepare and file FBAR reports, connected via SWIFT to its global banks. The system was selected based on capabilities, affordability, a vendor that listened and functional expertise in bank communications (a SWIFT service bureau).
The implementation process was complex and required a solid roadmap and execution. CB&I had to coordinate significantly with banks, the key partners in development of a sound, audited reporting procedure.
Project execution required strong project management including goals, objectives, team roles, definition of user roles and reporting formats. CB&I held regular meetings with the vendor, project team and senior leadership to keep the project on track. It also followed a phased rollout to gain benefits as quickly as possible.
A key lesson learned is that an implementation and system customization is an evolving process that changes as it progresses. SWIFT bank implementations are a large series of individual projects within each bank. A one-size-fits-all approach does not work. Change management is also important. You must be flexible as you alter processes and encounter roadblocks.
In the end, CB&I realized the benefits of automating bank account management and FBAR reporting. The resultant system addressed pain points and provided a capability that would have been extremely difficult to perform manually, given the newly combined organization.
What to expect?
Your FBAR system needs to resolve the challenges that corporates face. These features include:
- Balance reporting retrieval: An automated way to retrieve balances from varied sources, either automated connectivity with banks, ERP systems or data imported from TMS and other sources.
- Balance update: An automated process that ensures balances are kept up to date.
- Account signatory maintenance: Workflow and reports to be shared with banking partners, ensuring that the account signer detail is accurate.
- FBAR draft review: Creation and distribution of FBAR draft for review and approval by relevant internal and audit partners.
- Approval workflow: A systemic workflow for review and approval of the FBAR draft.
- Submission of PDF: Creation of a correctly-formatted PDF FinCen Form 114 for review, update, and submission to the IRS.
In addition to these features, the system must be able to leverage data. Your solution should be able to interact with global banking partners, your BAM data, cash management repository for historical balances and account tracking, human resources, and individuals for their personal offshore balances and investments. The best solutions provide consideration of all of these data requirements.
There are a range of systems available to assist with the creation of FBAR reports. Some provide data required for the form; others are full-service, providing automated data collection, validation, report generation and submission. If your process is laborious, manual, and error-prone, there are solutions to simplify your workflow.
Please contact Jeff_Diorio@TreasuryStrategies.com with any questions.
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