Larger companies have already been able to cover invoices with Automated Clearing House (ACH) transfers for many time. Their accounting systems create a document of the amounts to be paid and link this to a document containing the banking information for his or her suppliers. This file is delivered to the organization bank, which processes ACH payments overnight that can be found in the financial institution accounts of suppliers by another morning. One problem: The suppliers haven’t 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 result is just a callback to the organization, requesting the detail and so 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 setup the ACH payment system. Some companies have created a system 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 great alternative for larger companies may be the PayBase Electronically Sent Payment module, made by Bottomline Technologies (www.bottomline.com). This software can be linked through a custom interface to any existing accounting package. It generates standard files from accounting records that meet ACH transaction formatting standards, automatically transmits this information to the organization bank, and—the important thing part—automatically sends remittance details to the customer by e-mail or fax. Given the slight delay in the transfer of ACH funds, this means that the remittance detail may actually arrive at the supplier before the payment, thereby giving the supplier warning to test its bank account fully for incoming funds the next morning. This application may be used not merely for payments to suppliers, but and also to employees for both payroll and expense reimbursements. However, that is an expensive software package that needs the construction of a tailored interface between the software and a company’s existing accounting software package. The full total price puts this best practice out of reach of all smaller companies.