MAKNA ISSUE ACH PAYMENTS WITH REMITTANCE DETAIL

Larger companies have already been able to cover invoices with Automated Clearing House (ACH) transfers for many time. Their accounting systems create a file of the amounts to be paid and link this to a file containing the banking information because of their suppliers. This file is provided for the company bank, which processes ACH payments overnight that can be found in the financial institution accounts of suppliers by the following morning. One problem: The suppliers have no supporting detail for the payments aside from the name of the initiating party, which appears in the info transmitted by the bank. The result is really a callback to the business, asking for the detail 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 put up the ACH payment system. Some companies have created a method 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 compared to payment.

A good alternative for larger companies may be the PayBase Electronically Sent Payment module, produced by Bottomline Technologies (www.bottomline.com). This software may be linked through a custom interface to any existing accounting package. It creates standard files from accounting records that meet ACH transaction formatting standards, automatically transmits these records to the company 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 could possibly arrive at the supplier ahead of the payment, thereby giving the supplier warning to check on its bank take into account incoming funds the following morning. This application may be used not only for payments to suppliers, but and to employees for both payroll and expense reimbursements. However, this really is a costly software package that will require the construction of a customized interface between the application and a company’s existing accounting software package. The total price puts this best practice out of reach of all smaller companies.