Do you find it difficult to get payments out to your vendors? Many companies have been finding it difficult to process their computer checks and get them sent out to pay their vendors. In the current environment there are so many employees, especially in the accounting areas, working remotely. No one is sure when things will get back to “normal” with this pandemic still infecting people and on the rise again. Transformation has been the ongoing theme of 2020, with the increased implementation of electronic funds transfers, companies are able to quickly adjust to paying vendors without having to head to the office. Plus electronic funds transfers make strides in productivity.
Many employees are working remotely due to the Covid-19 pandemic. Companies using are finding it difficult to get payments out to vendors. Many companies are requiring that someone go to the office to physically print checks, then hand them off so that someone else can sign them.
In an effort to provide payments to vendors without having to go to the office, many Microsoft Dynamics 365 Business Central users are looking to change their payment process and implement an electronic payment option. This allows for payments to be processed, remittance advices created, and an EFT file generated. The EFT file is then uploaded to the company’s bank account via the bank’s secure website. The bank’s website has the security for final approval before funds are released to the vendor. It allows companies to transmit payments without the need of printing a check, obtaining physical signatures, stuffing envelopes, or incurring the cost of postage. Yes, banks generally have a fee for this service, but it usually is cost-effective to process electronic (EFT) payments rather than the cost of check stock, envelopes, and postage. It also eliminates the need for the trip to the office, allowing employees to continue to work remotely.
Yes, there is a bit of setup/configuration that needs to occur. Most banks use a form of the NACHA (National Automated Clearinghouse Association) file format but may have a slight difference from the ACH (Automated Clearing House) and actual Electronic Funds Transfers. You will also need to start collecting the information from your vendors as to which account the funds will be transferred. Once you configure the file format and capture the vendor bank accounts, the process will be similar to your current check processing procedures. The first step is to make arrangements with your banking institution to process electronic funds transfers or EFTs. You bank will provide you with the format in which they will accept the data.
The information that the bank provides allows you to set up the data exchange definition to process the files. This involves creating the definition and then mapping the columns in the data file to the applicable fields in Microsoft Dynamics 365 Business Central. You will also be able to build out transformation rules for the data exchange definitions. This may be necessary to change the data, for example make all characters in a field to be all uppercase, trimming a field to remove spaces before and after a value, replacing one value with another, or maybe change a date format. These are just a few examples of some of the transformations you can create. These definitions can be set up in a Sandbox for testing and exported for import into the Production company once testing is complete.
You will also need to update the Microsoft Dynamics 365 Business Central Bank Account Card with the EFT specific fields. It is also necessary to capture the banking information for the vendors that you want to pay electronically. This involves creating the vendor bank account information and indicate that the account will be used for electronic payments. You can also set the bank code as the Preferred Bank Account on the Payment FastTab on the Vendor Card.
Once you have the setup complete, you can begin to make payments to your vendors and export a file with the payment information via the Payment Journal page. A file can then be uploaded to your bank to process the payment transfers.
As I mentioned, this is a fairly simple process. Create your Payment Journal, but instead of the bank payment type being computer check, the field should now reflect Electronic Payment. You should also review the Recipient Bank Account and ensure that it is populated with the vendors bank code. You can choose the Bank > Export action when you have completed the payment journal lines. You’d complete the Export Electronics Payments page. You can indicate the Output Options for creating the remittance. If errors occur, they will appear in the Payment File Errors in the FactBox. A successful Export will create the remittance advice for the payment and add the payment to the Generate EFT File page.
After you have created the remittance advice(s) for the payment journal, you can then generate the file. On the Payment Journal, choose the More Options feature then Actions > Functions > Generate EFT File. All payments that have been processed, but not yet generated, will appear as lines on the Generate EFT File page. Choose the Generate EFT File action to export the file for all the EFT Payments. The bank payment file is ready to be uploaded to your bank for processing of the actual payments. You can now post the payment journal lines.
This blog was originally posted on dynamics-discussion.com