Save Time And Money With ACH Electronic Payments

Product Update 2 for Sage ERP MAS 90 and 200 Version 4.4 included the addition of ACH (Automated Clearing House) Electronic Payments for Vendors. Using ACH Electronic Payments, you can increase efficiencies, improve cash management, lower operating costs, and reduce the risk of lost or stolen checks or check fraud by paying your vendors electronically. In this article, we take you through the features and processing steps of ACH Electronic Payments to give you an idea of how this useful enhancement works.

Electronic Payments Benefits
ACH Electronic Payments allow you to transmit payments electronically directly from your financial institution to your vendor. You can save the time and cost of printing paper checks, and reduce the risk of checks being lost or stolen. And, because you can control when the payments leave your bank account, you improve cash flow management as well. For companies that reimburse employee expense through Accounts Payable, the ACH Electronic Payments feature allows employees to receive their expense payments as a direct deposit to their bank account. They even can specify multiple bank accounts to distribute the funds to.

How It Works
Vendor ACH Electronic Payments works much the same way as Direct Deposit in Payroll. Once you enable Electronic Payments in Setup Options, you have the flexibility to set up one or more financial institutions for your electronic payments; you will define the format and layout of the ACH file for each financial institution. ACH Electronic Payments includes the ability to adjust the file format to fit your financial institution’s required layout – without hiring a programmer. After setting up bank account information for each vendor, you send a pre-note, which is a zero-dollar transaction to test the validity of bank account information. Pre-note selection and approval registers help this process run smoothly.

Electronic Payment Flexibility
A new drop-down selection in Vendor Maintenance from the More button provides access to electronic payment information for vendors. Here you set up the bank accounts and routing numbers where vendors will receive payments. Multiple accounts can be used, and a distribution method for the account selected, such as Fixed Amount, Percent of Gross, and Percent of Net. Buttons here allow you to flag a vendor for pre-note selection and approval. You also can see the date that the prenote was sent and approved, and the YTD amounts deposited.

Activate Security
In order to provide access to ACH Electronic Payment functions, security must be activated. In Role Maintenance, Module Options, there is a new checkbox to select: Allow Vendor Electronic Payments.

Processing Electronic Payments
Processing ACH Electronic Payments is much the same as normal check processing. In Invoice Payment Selection, you can select Yes to include Electronic Payment Vendors. There also is an option to pay electronic payment vendors by check, so that you can continue to pay vendors during pre-note validation and approval process.

The Invoice Payment Selection Register displays the accounts and amounts of electronic payments. Check Maintenance is now Check and Electronic Payment Maintenance, and the total amount for electronic payments is displayed on the check maintenance screen. If you select to pay both checks and electronic payments at the same time, both checks and remittance advice forms must be printed before updating the register. The same bank code also will be used for both types of payments. If you want to use separate bank codes for checks and electronic payments, this can be accomplished by processing checks and electronic payments separately. Just as with checks, you may include an Extended Stub on the remittance advice to provide more detail to the vendor regarding the payment.
You must update the Check and Electronic Payment Register before you produce the ACH file for your bank. Then you can generate the ACH file and print the ACH file listing. You also can view previously generated ACH files from the Generate ACH file screen.

Are you ready to save time and money with ACH Electronic Payments? Please give us a call for assistance, or with any questions you may have.