BSP Reconciliation Guide: Automate Your Travel Agency Accounting

The BSP Process Explained

The Billing and Settlement Plan (BSP) is IATA's financial settlement system that facilitates payment between travel agencies and airlines. Operating in over 207 countries and territories, BSP processes approximately $260 billion in airline transactions annually with a reported 99.999% on-time settlement rate.

BSP works through a standardised reporting cycle. Agencies report their sales (tickets issued, refunds processed) to the BSP Data Processing Centre. The centre validates the data, calculates net amounts owed, and facilitates the transfer of funds between agencies and airlines through designated bank accounts. Each reporting period covers a specific date range, and settlement happens on a fixed schedule.

For European agencies, BSP settlement typically follows a bi-weekly cycle, though this varies by market. The agency receives a billing analysis showing all transactions processed during the period, which must be reconciled against internal records to ensure accuracy.

Common Reconciliation Errors

BSP reconciliation errors fall into several categories that agencies must monitor:

Duplicate Transactions: A ticket may appear twice in the billing analysis due to system glitches, reissue errors, or timing issues between GDS and BSP reporting windows.

PNR Mismatches: Typos or formatting differences in Passenger Name Records can cause matching failures when reconciling BSP data against internal booking records.

Misapplied EMDs: Electronic Miscellaneous Documents for ancillary services (excess baggage, seat upgrades, special meals) may be attributed to the wrong booking or processed under incorrect fare codes.

Currency Conversion Errors: Multi-currency bookings can produce discrepancies when exchange rates applied at ticketing differ from those used at settlement, particularly in volatile currency pairs.

ADM and ACM Management

Agency Debit Memos (ADMs) are issued by airlines to collect additional amounts from agencies, typically for fare calculation errors, commission overclaims, or ticketing violations. Agency Credit Memos (ACMs) flow in the opposite direction, crediting agencies for overcharges or adjustments in their favour.

Under IATA Resolution 850m, agencies have a 15-day window to dispute ADMs. Common ADM triggers include: incorrect fare basis application, wrong commission percentage claimed, invalid tour codes, and failure to apply applicable surcharges. Managing ADMs effectively requires prompt identification, documentation of the original booking context, and timely response within the dispute window.

ADM volumes have been increasing industry-wide, with some agencies reporting 3-5% of their transactions resulting in ADMs. Automated monitoring and early detection of potential ADM triggers can significantly reduce exposure.

Manual vs. Automated Reconciliation

Manual BSP reconciliation is a significant operational burden for travel agencies. Industry surveys indicate that agencies spend 15-20% of their operational time on financial reconciliation tasks. For a mid-sized agency, this translates to one or more full-time staff dedicated purely to matching BSP statements against internal records.

Automated reconciliation systems can reduce this time by approximately 75%. They work by automatically ingesting BSP billing data, matching each transaction against the agency's booking records using multiple matching criteria (ticket number, PNR, passenger name, route, fare amount), and flagging only genuine discrepancies for human review.

The key advantage is that automation handles the 95%+ of transactions that match correctly without human intervention, allowing staff to focus exclusively on exceptions and disputes that require judgement.

Multi-GDS Reconciliation Complexity

Agencies using multiple GDS platforms (Amadeus, Sabre, Travelport) face additional reconciliation complexity. Each GDS produces booking data in slightly different formats, uses different transaction identifiers, and may report to BSP on different schedules.

A ticket issued through Amadeus and a ticket issued through Sabre for the same airline will appear differently in the agency's internal systems but identically in the BSP billing analysis. The reconciliation process must normalise these different source formats into a common schema before matching can occur. Without automation, this cross-GDS matching is error-prone and time-consuming.

VAT and Multi-Currency Considerations for European Agencies

European agencies face particular complexity around VAT treatment of travel services. The Tour Operators Margin Scheme (TOMS) requires operators selling packages to calculate VAT on their margin rather than the full price, but the rules for what constitutes a "package" and how margins are calculated vary between EU member states.

Multi-currency operations add another layer of complexity. Agencies selling across eurozone and non-eurozone markets must handle currency conversion for both customer billing and supplier settlement. The gap between the exchange rate at booking time and settlement time can create a 1-2% discrepancy that must be accounted for in financial records.

The EU has been consulting on potential reforms to the TOMS scheme, with discussions ongoing about standardising the calculation method across member states. Agencies need systems flexible enough to adapt as regulations evolve.

Recent IATA BSP Changes

IATA has been evolving the BSP framework to reduce settlement risk and improve efficiency. Resolution 812, which governs remittance frequency, has been updated to align reporting and settlement periods more closely, reducing the average time between ticket issuance and funds transfer from 19.5 days to approximately 12.4 days in markets that have adopted the new schedule.

These shorter settlement cycles mean agencies have less float time and need to reconcile more frequently. Automated reconciliation becomes increasingly important as the window between billing and payment narrows, leaving less time to identify and dispute errors.

How Zenith Automates the Reconciliation Workflow

Zenith ingests BSP billing data automatically as it becomes available, matching each transaction against internal booking records using a multi-criteria matching algorithm. The system handles format differences across GDS platforms, resolves common PNR variations, and applies currency conversion rules appropriate to each market.

For ADM management, Zenith monitors incoming memos, correlates them with original bookings, and provides the documentation needed for dispute responses within the 15-day window. The platform tracks ADM patterns to identify systematic issues (agent training gaps, fare rule misunderstandings) that can be addressed proactively.

Commission reconciliation in Zenith tracks expected versus received amounts per airline, per agreement tier, automatically calculating overrides and incentive bonuses. When discrepancies arise, the system generates detailed reports showing exactly which bookings are affected and the financial impact of each variance.