Setting up ACH and EFT in Dynamics GP (Video)

This recorded webinar will go through the basics of setting up ACH / EFT for accounts payable and accounts receivable in Dynamics GP. We’ll walk you through the settings and the default setups.

Transcript below:

– [Katie] Hello, everyone. Thank you for joining us today for our “Dynamics GP Coffee Break | Setting up ACH and EFT in Dynamics GP.” My name is Katie, and I’ll be the facilitator today. If you have any questions during the presentation, please type them into the question area in the control panel on the right-hand side of your screen and we’ll answer questions at the end.

This session will be recorded and posted on our blog as well as shared with you later this week. Now, I would like to introduce our presenter today, Don McNulty, who is a solutions architect at Encore. Don, I’ll pass it on to you.

– [Don] Thanks, Katie. So today we’re going to talk a bit about setting up ACH and EFT. It’s something that we get lots of questions on here at Encore about this. So, you know, what is it? Why do we do it? And things like that. So what ACH and EFT is.

ACH is the automated clearing house in the United States and EFT is used as a terminology more in Canada. Basically, it allows you to issue checks through the bank so that you don’t actually have to mail them, you just send them directly to the bank, and the bank then sends them on to the individuals. Most firms are currently doing somewhat of this with wire transfers or e-transfers and things like that, but this is an automated process.

Why do we want to do this? Well, it allows us to issue checks and payments to our vendors without the risk of putting a check in the mail that can be stolen and potentially changed. It goes directly to the bank, and the bank then deposits it directly into the person’s account. So what do we need to do this? So what we need to be able to do this is there’s two major areas that we need to set up.

One is the company. We have to set up the bank file. How does the bank…what bank do you use? What bank file do you need to set up? What format does your bank accept from GP? And then you need some information from your bank data centers and some other things that you don’t necessarily know yourself that you have to ask the bank for.

You have to be set up on the bank side as well. There are some service charges associated with these batches as they go up because, of course, the banks need their service charges to remain in business. The vendors themselves, we need information from your vendor as well. You need approval from them in order to deposit money directly to the bank. You need their bank account and their different pieces of information.

And some vendors don’t want to give this. So in other words, you still have to be able to do checks as well. But one thing about the vendor is we also need email information because we want to be able to send a remittance advice to the vendor to tell them what invoices we’re paying for. Because if we’ve got 15 invoices outstanding and we only pay 6, we want them to apply it the way we have so that our accounts payable matches their accounts receivable, everybody’s happy.

And then the next thing, and then we’ll do a quick demo and then I’ll have some questions after that. I don’t have an awful lot more than that to say. Well, it’s more about how we actually do this. So what I’m going to do now is I’m going to pop over to Microsoft Dynamics GP. So this is Microsoft Dynamics GP. And when we go into Financial, we have Chequebooks.

And inside our Chequebooks, we can pick specific checkbooks. So inside here, I’m going to pick RBC, the Royal Bank of Canada. And I’m going to do this for a Canadian company, but it works exactly the same for a U.S. company. So what we do inside here is in here we put in the information that you see here.

This is standard checkbook stuff. You have this already set up. If it has an exchange rate or, well, if it’s a multicurrency account, it can be here. We can do this cross border, and some banks accept cross border. So the Royal Bank, for instance, will accept this in either domestic or foreign currency.

You can send the EFTs into the U.S. or you can send them directly into Canada. The U.S. banks, you have to talk to your bank as to what it is. I know that Chase does allow multicurrency, but some of the smaller banks do not. We’re going to go down to the bottom here. There’s an EFT button here, EFT Bank. And when I click on the EFT Bank, it comes up looking like this originally. And I have to reset this back to scratch so that we can start from the beginning.

And inside here we pick our Country or Region. And you can pick, you know, United States. In my case, I’m going to pick Canada. When I pick Canada, it picks all of this information. Now these are the pieces of information that you need to do. This Transit Routing Number is the bank and the branch. So in Canada, 003 is the Royal Bank, and 06520 is the branch.

And then you would go to the next thing. And then you would put in your Account Number, and this is your personal account number. And then the rest of this is optional in a lot of cases. So people will put down Bank Company Name. They’ll type in something like Royal Bank, and the Royal Bank will provide you that information. They want this to match their system.

The Company ID Number is Fabrikam, like so, and here we are. This Data Center Code, this is the other number that you need from your bank. This is which data center does it go to. In the case of the Royal Bank, they have four or five different data centers. Am I pushing this through Toronto or Winnipeg or Vancouver or Halifax or wherever the different bank accounts are?

And in the case of the U.S., they will provide you with the same kind of thing. The File Number is an incremental counter that will occur. So when I’m done here, I go, “Well, now I’ve got to..” That looks good so far. So I’ve got some information inside there. So now I click on the Payables inside here. So here I can use the Next Cheque Numbers.

I wouldn’t use the Next Cheque Numbers because those are your actual physical checks. So you want to use your own EFT Numbers. And you don’t need that many zeros. In most people’s cases, you know, 10,000 is probably enough. And then you can have it based on the vendor. So you can have different formats based on your vendors. So for instance, if you’ve got some vendors that need it in format one because I’m pushing it through one bank account, and format two on another one, I can do that.

I’m going to use a single format today. And from here I can type in RBC, and it asks me to add the format. And this is where we need to have our Format Type. Now underneath the Format Type, there are a lot of predefined pieces. Now in Canada, we’ve got the Royal Bank, so I can select it.

In the U.S. we would use these NACHA-CCD and PPD+ and PPD. Your bank will tell you which of these formats they use. This covers approximately 90% of the banks. So most banks have a predefined piece. We click on the Royal Bank, and when I do that, it auto-fills the bottom. And inside here, I have files for the Header, the Batch Header, the Detail, the Addendum, Settlement, Batch Control, and things like that.

At this point here, that’s all I need to do for the Royal. We can change these, item by item, piece by piece. We can pad them with different characters. We can grab different data fields. So if your bank requires a specialized piece that does not match one of those predefined formats, we can actively go in here and create the format that your bank requires. It does take some time.

So there is some cost associated with it while we go through and do it and then we do the testing and things like that. But that’s what we can do. You can delimit it, you can do things like that. Now the case of the Royal, they use a fixed link. They don’t need a delimiter. It’s a fixed link file. So that’s the file that we’re going to use.

And I’m going to hit Save. So at this point, when I go back to here, I now have this. I now have to say, “Where am I going to put my domestic payments?” Okay? So I’m going to put it in here. That’s where I’m going to put it, Dyndata/Client. And then I’m going to put in Foreign Payment in the same place.

I’m going to go Save. And the Prenotes, if you decide you want to use Prenotes, I’ll put them in the same spot as well. You need to give it a location. This location should be a network location. I do not have a network. I’m on a single workstation. So you would put in something like your finance department’s place so that you know where to go and grab this file to upload to the bank once the file has been generated.

And then we click OK. And that basically sets us up for this particular application. So we can go like that. So that’s the setup for the company. So that’s the bank setup file and the bank info that I require. So then I can hit Save, and now my checkbook is now done.

So that’s great. My checkbook’s done. I’m good to go. I’m ready to create my EFT files. So now I have to go in and I have to go into my vendors. So when I go into here and I go into my Vendor cart, and I’m going to bring up a, I think it is…

by Class, and I’ll just scroll down on the Class and we will grab a Canadian one. We’ll use…how about we use TRAINING001? There we are.

So there’s TRAINING001. They’re in Quebec. So they will provide me the information that I need. So attached to this, we have a couple of things. First off, we have an email address. So inside here we would want to select the Vendor Remittance, make sure that the remittance is going to go out by email, so I can send it by email. So that’s fine, and we can go from there.

So that’s good. So that’s been set up. So now when I turn around, I now have to figure out, where do I put the banking information for the vendor? Well, the vendor has three different addresses down here. They have a Purchase address, primary, the Remit address, and the Ship From address. It’s the Remit To that we care about. So we would click on the Remit To here and it will bring up that Remit address.

This could be a separate address from the other two. In this case, it isn’t, but it could be. So inside here, this is who I’m going to remit it to. And at the bottom of this screen, I have an EFT Bank. So I can put a different bank onto each of these different addresses. So then inside here, this needs to match.

If they both say Canada, we’re good. Now this one I’m also going to put to 6520 and 123…something like this. Whoops.

Bank Name, Royal Bank. Bank Account is something like so. Give it 10 digits. There we are there. We specify over here whether it’s a Chequeing or not. And we also specify here whether it’s a Business or a Foreign Account. If we leave it as Not Specified, it will pick any one of them.

So it’s fine. You can use any bank account that’s got EFT set up. If I select these Foreign Accounts, it will automatically try and do it in a different currency. I’m going to leave it as Not Specified. That’s how most people do. My currency is Canadian. That’s fine.

If you had additional information like Swift Addresses and things like that, they can be added down here just by clicking this button, it’ll add more information onto the file. The banks will tell you what they require from your vendor. So in other words, your banks will accept certain amount of information and require certain information. If that information is not there, the file will be rejected by the bank.

So we go OK, and then we go Save. So that basically sets up training for EFT. And then what I can do is I can hit Save. And now what I need to do is I need to make sure that I’ve got a transaction for that vendor, TRAINING001. And I have four open transactions inside here.

Now inside here, if I go up to my View and I look at my Currency and I look at Originating, these are all in U.S. dollars and I am paying in Canadian, so I need a Canadian transaction. So I’m going to go out and enter a Canadian transaction. We’ll put in $100.

Go to Distributions. There it is, C$1,000. No problem, I’m good here. We go OK, and we hit Post.

And Post. Done.

So I’ve got two transactions in there that are in Canadian dollars. And I’ll just hit Cancel. So we’ve now posted all of those, and now it’s time to create a check. So what we do is we go…I’m going to build a…I’m going to go through the Edit the Payment Batch through the standard GP. I’m going to type in TESTEFT. When I do that, it’s going to ask me to add a batch.

When I add a batch, I hit the EFT button. Oops. Change this to the Royal Bank, and then I can select the EFT. Tells me that I’m going to do a Summary. I’m going to post the payment. I’m going to post the payment by Transaction. In 18.6, you can use Summary or Transaction.

And Summary means that for the batch, you get one entry in your bank rec rather than an entry for every single vendor. Prior to that, you would get one transaction for each check, just like a regular check, and then your batch with EFTs would clear the bank accordingly. So we can click the Summary.

I’ll put the summary on it. That’s fine. And then I’m going to hit Transactions, and I’m going to go to Edit Payment Batch. And there we are there. Now if I scroll down on here, you’ll see there’s an icon in this column inside here. And that icon there tells me that it’s EFT. And inside here it shows me this is I can add the Vendor Name if I wish and I can add the Payment Priority and things like that.

But down here, it does show me which transactions I add. If I click say TIMELY, right, it’s going to say the country/region has not been accepted. The remit address for this particular company does not have Canada listed on the EFT bank so cannot be put into this EFT batch, and it won’t let me select it.

If I click this one, of course, it’s going to select the two Canadian transactions. And there is the two Canadian transactions that I did, and I can make whatever changes I want to them and that would be fine. At this point here, I can go Process. So I can go to…I can edit the individual payments or I can hit Process. When I hit Process comes up with the batch.

Now inside here you’ll notice that you’ve got no power over your EFT or your Cheque Date. The GL Posting Date, you do have control over. The reason for this is that your EFT may not have the same date because it might take you two days to get it assigned before it gets into the bank. So Separate Remittance, that’s fine. I’m going to hit the Process at this point.

So I’m going to hit Process and we’re going to post this. And I will just go Cancel. I don’t need to see the edit list. And then, of course, it comes up with my Remittance Form. So this is where I would print my Remittance Form to my vendor. Now I’m going to hit the Print button. Ordinarily, you would hit the Send E-Mail if it can be done so.

So I can click on the Remittance Form, and I could select this. I do not have an exchange server that I have access to, so I do not have my email set up to actually operate. But this is where you would hit it. It would then ask for a login to your exchange server and it would then send the email directly to your vendor with the remittance address.

And I will show you what the remit looks like by printing it out. So I’m going to hit the Process and it’s going to be a template, and I’ll go Screen. So by default, as soon as it fires up Word, there it goes. There’s the remittance advice. So this is what the person would get as a PDF attached to an email saying that we have deposited $3,210 in your bank account and these are the two invoices that you’re paying, came from Fabrikam.

There’s the training systems and things like that. And, you know, this is the standard out of the box. No modifications have been done to this at all. This is exactly how it runs right out of the box, which in most people’s cases is enough. Some people like to get rid of the Discount and the Writeoff and just have the Amount, the Amount Paid, and the Net amount.

Depends on what you’ve got on your current Checks tab if you wish to make a change to this. It also can be modified if required. So that’s now been sent to the…we’ve now sent that to the vendor. So the vendor’s now notified. And then we hit the Post, which is to process it. So we hit the Process. And when I process, it’s now posted.

So now when I click on my Batch entry, you’ll see that it is no longer there. So at this point, the checks have been processed in GP. GP is finished. We have got our payments. If I go into my Transactions by Vendor, it will look like this TRAINING person has got those two paid. And I’ll go History and go Redisplay, and there’s the EFT001 for C$3,210, and there’s the other two entries there.

It is completed all the way through. However, you have still got one more step. So if I go down into my Transactions and I scroll down, I now have a button called Generate EFT File. So inside here, I select my bank like so, and there’s a list of all the check batches that have gone through the Royal Bank since the last time I generated an EFT file.

You can create a single EFT upload for multiple batches. This is important because you might do three or four batches during the day and upload once a day. Banks charge you a flat fee plus a dollar fee per each transaction as a service charge. By keeping it in one batch, you reduce your service charges.

So I can click on this TESTEFT, I can mark it, and then I can hit the Generate EFT. Inside here, I can also hit EFT Remittance Report. And if I click on this one and I hit Screen, I get this. This is the same remittance.

I could potentially send this also by email if I wanted to, but most people do it at the remittance advice. So then I generate my file, and there it is. So what has happened is it’s gone to Dyndata/Clients/RnR/Payment RBC, and then today’s date, or actually the system date, which is 0412 text file. So this is the text file.

So what I’m going to do now is I’m going to go out and take a quick look at this. Where did I put it? Oh, Clients.

And there it is there, 5/21, which is today. This is the file. And when I right-click on this and I Edit or I Open it, it will open it. And what it’s done is it’s got the… The first line is what is required by the bank. Second line is the information about your bank account.

Third line is the training, and this is the amount that we’re spending. There’s the amount, there’s the date, there’s the training systems, and things like that. And then the last number is telling you how many of these transactions there are plus the dollar amount and some filler. This is the format that the Royal wants. That’s fine. I’m not too concerned about it because all of this is correct because of a file structure that I’ve got. So we then send a copy of this to the bank.

The bank then processes it and it flows out the other side to the individual vendors. So that is where the vendor gets it. And then from this point, you go OK, and then you transmit it. So you would then go out and you’d log into the Royal Bank. You’d have security to log into the Royal Bank. You’d log into the Royal Bank. From the Royal Bank, you would upload this file, and the file would then be processed usually that evening.

It usually takes approximately, you know, 6 to 10 hours before it processes, and it usually clears the banks within a day after that across the board to all the different locations. Depending on whether or not there’s one or two hops required through clearing houses will determine whether the vendor gets it the next day or the day after. Ordinarily, on the email side, which I should mention when we go to the email.

Yeah, I know. When I look at my remittance advice…yeah, okay. You would set one up here.

You’d put a subject. You’d put in a body.

And I usually put in something like this, “in the next 24 to 72 hours for…” Now after that, I can then go into my Field down here and I can go Check Amount, Document Amount, Payment Number, Posted Amount, Document Number, and things like that.

Check Name, Posted Date, Payment Number, Document Number. And there should be a Check Total, Check Total. And I can go Insert. Something like that. And then you would say that’s fine, you have the remittances saved, and you’d hit Save.

And that’s what you would put in there. And then you would go Cancel. I’m just going to leave it. Okay. And that would be the subject in the body. The PDF would be the actual remittance advice. And that would be attached.

You can type in whatever you wish for your body and your document lines if you wish. You can embed it into the actual document, but we highly recommend that you present it as a PDF so they can save it to…whoever gets the email can then save it to the right location so that it gets applied correctly by the accounts receivable. Okay. Okay.

So that is EFT. That is setting up ACH and EFT in GP. That’s kind of a really brief one. You know, you have to go through the tests, you have to send a test file to the bank and make sure that it works properly before you try and do it because otherwise it will be rejected by the banks. You have to be careful on that. Once you get approval from the banks, it’s good to go, then you’re all set. And then all of your…you can then do check runs directly through EFT and ACH.

All right. Do we have any questions, Katie? I think I’m right on time. I am, 9:25. Perfect.

– Awesome. Thanks, Don. Just a reminder, if anybody does have any questions to please enter them into the question area in the control panel on the right-hand side of your screen. But I do have one here. So that is, when we pay for a vendor for multiple invoices, the ACH payment gets grouped into one. How can we break down the payment by each invoice?

– The bank… You always want to put it into a single. You potentially could. I don’t know if it’s still there. It used to be that you could go under the Payable setup and…

And I don’t know, sort checks. There used to be a toggle.

I think they’ve removed it, but you could pay by check. It would do a new check. You have to create a new check for each item. So allowing the summary is here.

That’s the new one inside there. Warn if the vendors have got… even the Long Description. The Remittance is where you get it. If they need a separate check for each invoice, then you’d have to create a separate check for each invoice, which you can do using your Edit Payment Vendor.

So inside here, if I go TEST and I click my TRAINING again, and I’ll just pick the U.S. one this time, TRAINING. So when I go into here, I could go into the Apply. I have my four invoices.

So I would have one invoice for $55,000 and then I would go OK. I could then go Save. I could then come into here and go TRAINING again, and go to Apply, and now I can pay my $8,000 and go OK. So that gives me two separate ones.

So now if I was to generate this as a check run, I would get two checks, one for each invoice, but I’d have to do that manually inside there. When you select your checks from the Build Payment Batch, it does give you that option down in here. And in that it allows you to select, where is it, here, Discount, Document Currency. Yeah, this one here.

Use the Vendor Option, use the Vendor, or the Invoice. So the default on the vendor itself is set to Vendor. You might be able to do it. I have not tested this, but you could potentially do it through your vendor card. We will go to TRAINING again. There we are there.

If I go to Options inside here, there is a button here that says, where did it go, One Payment Per Vendor or One Payment Per Invoice. If you select Payment by Invoice, when you select these, it will select individual payments for each one, right, but you couldn’t use that batch one. You’d have to use this selection and then the edit individual checks because the select by payment batch wants to put it all together.

Ninety-nine point nine percent of the time people want it together, okay? But there’s the toggle there. It used to be a global toggle and then they moved it to the Vendor in I think 18.2, but it might have been 18.0 that they allowed you to specify the number of payments for each one based on the vendor rather than at the global level.

– Awesome. Thanks, Don. And we do have a few questions left, but unfortunately, we are at time for today. So if anyone has questions that we haven’t answered, we will get back to you by email later today. I do want to share that we will be taking a break for “GP Coffee Break” series over the summer and resuming again in the fall, but we are still hosting a few different webinars, and I’ll add the link to our events page in the chat if you’d like to register for upcoming sessions.

I’ll also add the link where you can set your email preferences and opt into our quarterly emails so that you can stay in the know about our upcoming events and see our latest blog articles. But thank you, Don, for the information. Thank you, everyone, for joining us today. Have a great rest of your day.

– Thank you.

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