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Larger companies have already been able to fund invoices with Automated Clearing House (ACH) transfers for a few time. Their accounting systems create a record of the amounts to be paid and link this to a document containing the banking information for his or her suppliers. This file is provided for the organization bank, which processes ACH payments overnight that can be found in the financial institution accounts of suppliers by the next morning. One problem: The suppliers don’t have any supporting detail for the payments with the exception of the name of the initiating party, which appears in the info transmitted by the bank. The effect is really a callback to the business, requesting the detail therefore the supplier can properly post the receipt information in its accounting system. This extra contact essentially eliminates enough time saved by the originating company when it first put up the ACH payment system. Some companies have created something that issues separate payment notifications by mail, but this extra system requires manual labor and results in supporting detail that arrives in the mail days later than the payment.

A good alternative for larger companies may be the PayBase Electronically Sent Payment module, created by Bottomline Technologies (www.bottomline.com). This software may be linked through a custom interface to any existing accounting package. It makes standard files from accounting records that meet ACH transaction formatting standards, automatically transmits these details to the business bank, and—the key part—automatically sends remittance details to the consumer by e-mail or fax. Given the slight delay in the transfer of ACH funds, which means that the remittance detail might actually arrive at the supplier ahead of the payment, thereby giving the supplier warning to check its bank account fully for incoming funds the next morning. This application may be used not merely for payments to suppliers, but also to employees for both payroll and expense reimbursements. However, this is a pricey software package that will require the construction of a personalized interface between the program and a company’s existing accounting software package. The total price puts this best practice out of reach on most smaller companies.

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