Overview: ACH Processing

PowerShift supports electronic vendor payments made through Automated Clearing House (ACH), an electronic network for financial transactions in the United States.

The benefits of making ACH payments are many: You don't have to guess how long it will take for a check to leave your business and arrive at the vendor; you simply schedule payment for the date you want the payment made. You have the peace of mind that your payment will not be lost or late due to mail theft or delivery delays. Since there is no check, the possibility of check tampering is eliminated. Paper usage and associated handling costs are also reduced. Paying via ACH could even give you a competitive advantage with your vendor -- and that could result in lower costs.

From the perspective of PowerShift, printing and mailing checks is replaced with the transfer of a PowerShift-created ACH file to your bank for processing. Vendors receive an email notification of payment that includes the invoice number, amount paid, discount taken and other details. The notification is their assurance that funds will arrive at their banks in short order.

Setup

Setup is minimal, as outlined below. Once you initiate ACH payment and confirm it is working, you should only need to make changes if banking information changes.

Use AP Payment Method Codes Maintenance (TAPM) to create an ACH payment type.
Use Payment Method Batch Maintenance (TAPMB) to create payment method with your banking information. You must select the ACH payment? and Print non-negotiable voucher? fields for ACH payment methods.
In Vendor Maintenance (VM), for each vendor you plan to pay via ACH, enter the appropriate payment method, batch and notification information.
In Alternate Remit-to Maintenance (VRM), add the vendor's banking information and enable ACH.

System Options

Two system options (maintained in System Options Maintenance - Accounts Payable Options) control the default payment date that is supplied when an ACH payment is entered.

Default ACH date to discount/due?
If selected, the payment date is defaulted as follows: the discount date is the payment date if it is later than the system date. If discount date has passed, the due date is the default payment date if it is later than the system date. Finally, if both the discount and due dates are in the past, the system date is the default payment date.
Offset ACH payment date if today?
If selected and the payment date is today, a one-day offset is added to the payment date.

Processing

AP payment processing is unchanged. You select invoices for payment and process them. But rather than printing checks, you upload the ACH file to your financial institution. The vendor receives an email that details invoices paid and cash is withdrawn from your account (and credited to the vendor's) on the due date you specified.