ACH – Vendor Payments

ACH for Vendor Payments ACH (Automatic Clearing House) is payment method where pre-determined a

vendor will receive a University payment electronically. We currently provide this service for our employee and non-employee vendors. The process for setting up the vendor relationship is different for employee and non-employee vendors. Once the relationship has been established, the vendor will receive all accounts payable payments via an ACH.

None of our current UPS processes will change – logging invoices, receiving, matching, disbursing, and creating a planned payment record. When the check jobs are processed by the Treasurer’s Office, the system will determine the appropriate payment type for the vendor (check, ACH, or Payment Plus). For ACH payments, we will use a payment type of AD (AP Direct payment). An ACH payment transmission file will be created so Cash Management can send the file directly to our bank for processing.

Employee Vendors

The left side of the screen displays information from the vendor file while the right side of the screen displays information from the employee file.

If the information displayed on the screen appears to be for the same person, type the employee id in Vendor Employee ID field.

Suggestion - Do not add the employee id to an Agent vendor id

An employee vendor must be set up in VEMP (Vendor Emp ID) before the employee can select their bank account.

Positive Link of Vendor to Employee

Due to the potential of an incorrect social security number on the vendor file resulting in an Employee's update of their bank information on the web placing their bank and account on someone else's Vendor record has necessitated the creation of a positive link between vendors and employees. An employee will be considered a vendor (and his bank and account placed on the vendor file) only when social security numbers from both files match and the Emp-ID on the Vendor file matches.

To facilitate proper maintenance of this new field, nightly the Employee file is checked for a match of the Vendor SSN. The following tests are performed and if any one fails a vendor attribute is set.1) The Vendor SSN matches an Employee but there is no Emp-ID on the Vendor

file. 2) The Vendor SSN matches an Employee but the Emp-ID on the Vendor file is

different from the Emp-ID with the matching SSN. 3) There is no SSN match but the Vendor file has a non-zero Emp-ID.

Employees may request a direct deposit either by paper form or via webBASIS. ◦ For new bank account requests, a cancelled check is required for verification of the bank

information. Note: requesting a new bank account in webBASIS creates a TARGET transaction that must be approved by HR.

◦ If the bank is unfamiliar, HR verifies the routing number on NACHA website.◦ Once payroll verifies the information, they assign a bank code to the routing number. ◦ The bank code allows HR to change the routing number for the bank in the case of a merger without

having to change each employee record. ◦ The bank code (name and routing number of bank), the account number, and type of bank account

(i.e. checking or savings) is entered on the employee's record. ◦ HR has agreed to add any new bank codes for Accounts Payable.

Vendors are only allowed one bank account for ACH use. As a convenience to the employee and to prevent confusion (and to avoid the potential for the vendor

account number to be forgotten and not updated when payroll information is updated), the decision has been made to tightly couple the maintenance of payroll and employee vendor bank account information. To select an account for use on vendor payments, the account must exist as an employee's direct deposit account list. It does not have to be used for payroll payments (it can be set to zero percent), but must exist on the employee record.

Non-employee vendor (on VACH) is not routed to Human Resources, instead the vendor maintenance person must approve it.

When setting up a non-employee vendor, it may become necessary for a new bank code to be added. If so, please contact the Payroll Office to create a new bank code.

Human Resources Role

The employee may select an existing Payroll bank account from one of the defined Payroll bank accounts.

If the employee wants to request a new account, the request will route to Payroll for approval and the employee must provide a cancelled check.

This UPS vendor reimbursement account selection – is not displayed or available for employees who have not been set up as a UPS vendor (based upon a SSN match).

An employee will go to one place to update all of their banking information. A 3270 function (screen) available only to Payroll to mirror this process, and can

be used for independent updates (not originated via webBASIS). For non-employee vendors, VACH is available in UPS where vendor ACH bank and

account information can be recorded -- but will not allow updates if the vendor is an employee.

Establishing Vendor ACH Bank Accounts

Vendor ACH - VACH

VACH – is the function where vendor bank information may be entered so that all payments are sent via ACH. Note: this information is at a vendor level.

This is a TARGET function that routes to the Payroll Office to verify the bank code.

The ACH Remit Email is a required field to ensure the vendor receives the remittance information using this email address.

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Example of a Vendor emailThis email was generated by the University of Arkansas BASISSystem regarding your Accounts Payable payment that was directdeposited to your Checking account ****8866 atUARK FEDERAL CREDIT UNION #2  Check Number: h000001774Amount: $ 780,193.49Paid to: U.S. BankVendor No: 100196-01-001Address: Somewhere in the USA Street Somewhere, MA 37373 Invoice(s): Invoice No:Suffix: 20110315 Purchase Order No: 0Invoice Amount: 91,972.43Remit Advice: https://www2.uark.edu/web-apps/comp/basis/Basis?apid=1606613&action=Find Invoice No:Suffix: 20110316 Purchase Order No: 0Invoice Amount: 22,797.68Remit Advice: https://www2.uark.edu/web-apps/comp/basis/Basis?apid=1606613&action=Find   If you have any questions, please feel free to contact our office at (479) 575-2551. Please allow one to two days foryour deposit to post and verify that your deposit has been made before expending the anticipated funds. Accounts Payable Office  

This email was generated from the TEST system Sent to Vendor ACH Email

Cash Management currently would prefer to have a 2 to 3 day turn around to process ACH payments, instead we add one day to the file when it is created. Cash Management sends the ACH file to our bank – the file is sent it to a federal clearing house for disbursement. If there are no problems with the account information on the file, the money is deposited.

We have two days to notify our bank if there was an error on the file we sent (i.e. overpaid a travel claim).

If there is a problem with one of the payments, we have to request back the full amount of the payment.

If the ACH fails due to an incorrect account number or a closed account, a rejection notice is sent to our bank who in turn notifies us.

Once an ACH is rejected, we have to reissue a manual check.

Cash Management ACH Processing

Payment (check) run – the Treasurer’s Office submits the jobs that extract all planned payment records with the appropriate payment due date.

The job determines whether a check, ACH, or Payment Plus payment is issued. For employee vendors, the system will create an ACH if the applicable bank information is

available. The employee will receive a remittance email using the employee’s preferred email.

For non-employee vendors, the system will create an ACH if the applicable bank information is available. The vendor will receive a remittance email.

ACH payments have a payment type of AD (AP Direct Deposit) or RD (Travel Advance Direct Deposit). These payments will be listed on the Accounts Payable Check Summary report as ACH Payments.

These payments will be transmitted to our bank by Cash Management.

Payment Process

Reissue – AD or RD Payments

If the payment has to be reissued in BASIS, a paper check will be issued and sent to the vendor.