CHAPTER 8 ACH ELECTRONIC FUNDS TRANSFER 8.0 OVERVIEW 8.1 REQUIREMENTS AND INSTALLATION Special Requirements

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1 8.0 OVERVIEW CHAPTER 8 ACH ELECTRONIC FUNDS TRANSFER MODULE The ACH Electronic Funds Transfer Module allows a collection agency to receive and process electronic payments through the Automated Clearing House (ACH) from debtors, including pre-authorized electronic payments in place of postdated checks. It also allows an agency to redeposit a returned (bounced) check assigned by a client. The time and costs associated with collecting are reduced due to the reduction in bank processing time and minimized direct debtor contact reduces the time and cost associated with collecting. The Electronic Funds Transfer Module is designed to create export files in formats that interface with the ACH Network. Receipt and processing of electronic payments requires minimal changes to the way transactions are processed by Debt$Net. Payments received electronically must be posted to Debt$Net through normal transaction posting processes. Once electronic payments process, the ACH Electronic Funds Transfer Module creates an interface file to export either to the interface software (if applicable) or to an ACH vendor. 8.1 REQUIREMENTS AND INSTALLATION Special Requirements The ACH Electronic Funds Transfer Module is designed to run on any computer currently running Debt$Net. Actual processing of electronic transactions requires a modem or internet access for transfer of files to the ACH Network. The computer that processes the file transfer must have access to both the Internet and the ACH out file. If you choose to use interface software (such as Win-Collect ) it must be installed prior to installing the ACH Electronic Funds Transfer Module. Install the software application in accordance with the manufacturer s Copyright 2007 The Computer Manager, Inc. 8-1

2 8.1.2 Installation directions. The ACH Electronic Funds Transfer Module and the interface software must be installed on the same computer. The first step to install this ESO is to have all user s log out of the Debt$Net system. You must have exclusive access to Debt$Net so that the new menu options will install correctly. To install the ACH Electronic Funds Transfer Module, select Install ESO s from the ESO s Menu ( ESO s ) (Figure 8-1). Debt$Net will then prompt you for the source directory for the ACH Electronic Funds Transfer install file (Figure 8-2). Figure 8-1. Install Eso s Menu Option. The default source directory for installing ACH Electronic Funds Transfer will be A:\. If this is incorrect (e.g., you have downloaded the install file to some other directory), right click to bring up the Select Directory Form. The default directory on this form is the directory where Debt$Net is currently installed. If the displayed location is still incorrect, specify a new location using the Drive drop down list at the bottom of the form. After selecting the correct drive, select the correct directory, then click the Select button to being installation (Figure 8-3). 8-2 Copyright 2007 The Computer Manager, Inc.

3 Figure 8-2. Select Directory Form. After installation, Debt$Net prompts you to select the file interface format you wish to use (Figure 8-3). Debt$Net interfaces with several ACH vendors. Choose between Win-Collect, Electronic Banking Systems (Ebs), EFT Network Inc. (EFT), National Payment Services (NPS), Echo, Echex, Vericheck, EPP, Nacha, Speedchex, or Regal. Make a selection from the drop down box, and hit Save. Then exit and reenter Debt$Net to complete the installation process. Figure 8-3. ACH File Interface Selection. Installation of the ACH Electronic Funds Transfer Module adds menu options and opens additional fields to capture the required data for electronic funds transactions. Copyright 2007 The Computer Manager, Inc. 8-3

4 NOTE: Installation must occur only after the interface software is installed (if applicable), and you must ensure that you are using the same computer on which the interface software resides. 8.2 ENTERING ELECTRONIC PAYMENTS To enter an electronic payment, follow the normal process for entering and posting a transaction by selecting Add Debtor Transactions from the Transactions Menu (Figure 8-4). Figure 8-4. Add Debtor Transactions. Select the debtor and the account to which the payment applies. On the Transaction Type Selection Form, select Debtor Payment from the Transaction Type drop down list to display the Payment Transaction Add Form (Figure 8-5). 8-4 Copyright 2007 The Computer Manager, Inc.

5 Figure 8-5. Payment Transaction Add Form. Enter the amount of the payment in the Transaction Amount field. Select ACH from the Method of Payment drop down list. In the field Type (C/S), indicate whether the bank account is a checking account ( C ) or a savings account ( S ). Enter information into the remaining fields as needed and select the Save button to save the transaction and exit the form. Another window displays with additional prompts for bank and electronic funds data (Figure 8-6). Table 8-1 explains these fields. NOTE: Also select ACH as the transaction type if this transaction is the redeposit of an NSF check assigned to the agency. Figure 8-6. ACH Information Fields. Copyright 2007 The Computer Manager, Inc. 8-5

6 TABLE 8-1. ACH INFORMATION FIELDS FIELD Enter or Verify Account No: Type (C/S) Routing No: Name on Check if not Debtor: Check No for Redeposit: DESCRIPTION Enter the bank account number from which the payment will be made. For NSF checks, use the account number on the check. Enter a C for checking account or S for savings account. Enter the bank routing number (also known as the ABA number). For NSF checks, enter the name on the check if it is different than the debtor name. Enter the number of the NSF check you are attempting to redeposit. NOTE: The last two fields are enabled only when the account category specified on the Account Maintenance Screen begins with NSF. After entering the ACH information, select Save to return to the Transaction Debtor Selection Form to enter another payment. Post payments normally, for any unposted payments not included in the ACH out file. NOTE: For more information on entering debtor transactions, see Section 5.2, Adding Debtor Transactions, in the Debt$Net 6.9 Users Guide. 8.3 SETTING UP PRE-AUTHORIZED ELECTRONIC PAYMENTS The ACH Electronic Funds Transfer Module may also be used to set up advance electronic payments agreed upon by the debtor, much like postdated checks. To set up electronic payments, select Maintain Postdated Check File from the Postdated Checks Submenu under the Transactions Menu (Figure 8-7). The Postdated Check Selection Form displays (Figure 8-10). 8-6 Copyright 2007 The Computer Manager, Inc.

7 Figure 8-7. Postdated Checks Submenu. Select the Add button to add a new pre-authorized electronic payment sequence. The Postdated Check Maintenance Form appears (Figure 8-8). Figure 8-8. Postdated Check Maintenance Form. Select the debtor and the account for which the payments apply by either entering the debtor and account numbers in the Debtor # and Account fields, or right clicking on the fields to select from a selection list. Enter the date of the first electronic transfer in the Check Date field. Enter the check number in the Check Number field. Enter the amount of the payment to be transferred electronically, then choose the distribution method for the payment. Select None to apply the ACH Copyright 2007 The Computer Manager, Inc. 8-7

8 payment to the account selected, Relative to apply the payment as a percentage against the balance of all accounts, or Oldest First to apply the payment to the oldest account. Under Method of Payment, select ACH. Click the Save button to display another screen prompting you for additional ACH information (Figure 8-9). Figure 8-9. ACH Information for Pre-Authorized Electronic Payments. Enter the debtor s bank account number in the Enter or Verify Account No field. Enter the bank routing number in the Routing No field. Default values display if available from previous transactions for this debtor. If default values display, from a prior entry, verify accuracy. In the field Type (C/S), indicate whether the bank account is a checking account ( C ) or a savings account ( S ). NOTE: Whenever banking account and routing information is captured in Debt$Net through the ACH ESO, this information is also stored on the Debtor Screen under the ESO tab. Enter the frequency of the transactions in the Frequency of Transactions field. The frequency is the number of days between electronic payments (for example, entering 30 in this field specifies monthly payments). Enter the number of transactions in the Number of Transactions field. This is the number of electronic payments agreed to by the debtor. Ideally, the payment amount times the number of payments will pay the account in full. 8-8 Copyright 2007 The Computer Manager, Inc.

9 After entering the necessary information, select Save. The Postdated Check Selection Form re-displays listing the electronic payments entered (Figure 8-10). Figure Postdated Check Selection Form. Electronic payments entered through the Post Dated Checks Maintenance Form may be updated or deleted like postdated checks. When you select the Process Post Dated Check File option from the Postdated Checks Submenu, Debt$Net processes the electronic transactions due for the processing period specified. Post payments normally, for any unposted payments not included in the ACH out file. NOTE: For more information on the postdated check process, see Section 5.7, Postdated Checks Submenu, in the Debt$Net 6.9 Users Guide. NOTE: Pre-authorized transactions are only available through full versions of Debt$Net and Ven$Ture versions that include Ven$Ture Block A. Copyright 2007 The Computer Manager, Inc. 8-9

10 8.4 PRINTING A TRANSACTION DEPOSIT LIST Select Print Deposit List from the Transactions menu to display the Print Deposit List Form. Specify the date of the deposit and select Finish to print the list. Debt$Net prints two lists, one for transactions deposited to the bank, and one for transactions deposited through the ACH Electronic Funds Transfer Module to the ACH Network. 8.5 CREATING AN ACH ELECTRONIC FUNDS TRANSFER FILE Once you post all electronic payment transactions in Debt$Net, you need to create a file to export the data to your interface software (if necessary), or to your ACH vendor. From the Transactions menu option, select Post Transactions. The ACH Electronic Funds Transfer Module adds a new submenu option, Process ACH Transactions (Figure 8-11). Choosing this option allows you to process current transactions, combine debtor transactions, or re-process the last group of transactions (Figure 8-12). Figure Process ACH Transactions Submenu Option Copyright 2007 The Computer Manager, Inc.

11 Flag Process Current Transactions to create a file of all ACH transactions scheduled for today s date or earlier. When processing current transactions, you may also flag Combine Debtor Transactions. This consolidates multiple transactions for the same debtor into a single ACH transfer. If an error occurred while attempting to process the file, you may reprocess the file by flagging Re-process Last File. After processing Debt$Net displays a message stating the number of transactions processed and the name of the file created. Figure Process ACH Transactions Form. After the ACH out file has been processed, you will receive a confirmation of the number of records processed and the name of the file created (Figure 8-13). Figure Processing Complete Confirmation Message. Copyright 2007 The Computer Manager, Inc. 8-11

12 8.6 IMPORTING THE TRANSFER FILE After creating the ACH out file in Debt$Net, you must transfer the file to your interface software (if applicable) or your ACH vendor. Follow the documentation provided with the software or by the vendor for importing files. Then follow the directions to transfer the data to the ACH Network. 8.7 PROCESSING THE ACH RETURN FILE Certain vendors (e.g., Electronic Payment Providers (EPP)) supply a return file to be processed. The return file provides information to reverse any payments on accounts where the ACH payment did not clear. During the installation process, when the vendor is selected (Figure 8-3), Debt$Net will recognize that the specified vendor will return files for uncleared payments. For those vendors, a second menu option will be added for processing these files. To process the return file, select the menu option. Debt$Net will search for the file in the directory where Debt$Net is installed. If the return file is not found, a directory selection form will be displayed (Figure 8-2). Locate the correct directory, folder, and file. Then click on Select and process the file. As noted above, a reversal is created for each of the ACH payments that did not clear. Review the reversals by selecting the menu option Reconciliation under the Transaction Menu. It is recommended that you Print a copy of the Reconciliation Report. Once you have reviewed these transactions, post the transactions by selecting Post Transactions from the Transaction Menu Copyright 2007 The Computer Manager, Inc.

13 Copyright 2007 The Computer Manager, Inc. 8-13