Many companies pay their vendors with an Electronic Funds Transfer (EFT) instead of a check. An EFT transfers money from your bank account directly into your vendor's account. Checks are not printed, but you must print EFT advices and reports in order to register that payment has been made. After the electronic transfer is made, you must retain these advices and reports for your audit trail.
In order for a vendor to be eligible to receive an EFT transfer, the following conditions must exist:
On the Manage Company Bank Accounts screen, the information must exist for your own bank account and the bank accounts of each of your EFT vendors. Review this information via the Print Vendor Bank Information Report screen.
On the EFT Info subtask of the Manage Vendors screen, the vendor should be active and identified as an EFT vendor as follows:
The Bank ID field should contain your vendor's bank ABA that will be used for EFTs.
The Bank Account field should contain your vendor's bank account number.
The ACH Code field should contain one of the following values:
22 — A payment to a checking account
23 — A pre-note to a checking account
32 — A payment to a savings account
33 — A pre-note to a savings account.
After your payee successfully receives a pre-note, his bank will be ready to receive an actual payment.
Also on the EFT Info subtask, enter Y in the EFT Active field to make the vendor active for EFT transactions.
Select vouchers to be paid via the Edit Voucher Payment Status screen. Following your company's guidelines, approval may be necessary.
You can prepare only one of your company's bank abbreviations at each time for EFTs. If you want to create EFTs for more than one of your company's bank accounts, you must create each account's EFTs separately.
Print this report in lieu of the Print Prepayment Edit that you review before printing checks. The Print EFT Edit Report screen shows the scheduled payment information for EFT vouchers that are ready to be paid. The report prints information on the selected vouchers to be paid including the pay vendor name and ID, pay vendor address code, voucher number, invoice number, invoice and discount date, and so on. The total of this report signifies the amount that will be paid by wire transfer if you transmit from your bank account immediately. To change the items that appear on this report, make adjustments via the Edit Voucher Payment Status screen.
After you review and approve the EFT Edit Report, print the report and save it for your audit trail.
Now you are ready to create an EFT file on the Create EFT File screen. This screen does not perform the transfer. This screen creates a CTX file that you send to your bank in accordance with your bank's requirements. For new EFT vendors, you must first make a "dry run" of an electronic funds transaction. This transaction is called a pre-note and is performed just like a regular EFT, except the transfer amount is zero and the voucher is paid through a check on your next check run.
For these "new" vendors, the ACH Code field on the EFT Info subtask of the Manage Vendors screen should be 23 or 33.
If your vendor successfully receives the "zero" EFT, future EFTs will be completed for the selected voucher amounts after you change the ACH Code value to 22 or 32.
If your vendor does not successfully receive the "zero" EFT, you must continue to send pre-notes until a prenote is successfully transmitted. In addition, if your vendor changes banking information, you must send a pre-note again before sending an actual EFT to the vendor's new bank account.
After you create the file, the next step is to create a report of the file via the Print EFT Edit Report screen. If there is any item that is not correct, do not send the file to your bank. Repair the incorrect item through the Manage Vendors screen, EFT Info subtask, or Edit Voucher Payment Status screen. Then re-run the Print EFT Edit Report and review.
When the report is correct, re-run the Create EFT File and reprint the EFT Edit Report. After the EFT File is correct, but before you send the file to the bank, print the EFT advices via the Print/Void Checks screen. You may want to send a copy of the EFTs to your vendors as a remittance advice.
Select vouchers for payment or use the Edit Voucher Payment Status screen.
Print the Prepayment Edit report.
Print checks from the Print/Void Checks screen.
Select vouchers for payment or use the Edit Voucher Payment Status screen.
Approve checks (EFTs).
Print the EFT Edit Report to verify the transfer file.
Print EFT advices from the Print/Void Checks screen
Print the actual checks for any pre-notes from the Print/Void Checks screen.