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Title: Steps for Processing Payments via ACH

Brief description:

This entry details how to configure your Unanet system to record ACH payments processed through your bank. Rules and regulations that govern the ACH network are established by NACHA and the Federal Reserve (ACHA - ACH Network: How it Works). This document describes the steps to configure Unanet to process and transmit electronic ACHs for vendor payments using bank specific NACHA files.

What’s covered in this document:

Acronyms/Definitions

Automated Clearing House (ACH) - an electronic network for financial transactions in the United States. Examples of ACH credit transfers include direct deposit and vendor payments.

National Automated Clearing House Association (NACHA) - industry watchdog of the ACH network.

NACHA File - the file sent to your bank that instructs your bank of the amount and to what account to transfer your funds.

Initial Setup

  1. Create an ACH payment method to separate these transactions from standard system checks. (Admin > Setup > Accounting > Payment Methods)
    Typically, you will create and save the "remittance advice" or "deposit advice" related to the ACH payments, and send to the vendor. Creating a separate payment method marked as "System Check" for ACHs allows for systematic creation of the remittance advice.



  2. Create a duplicate operating bank account that is identified solely for use with ACH payments. (Admin > Setup > Accounting > Bank Accounts)
    Using a different numbering scheme allows for easy identification but more importantly allows for separate control of the numbering sequence for ACH payments from the actual System Check numbering sequence.



  3. Specify which Vendors should be paid via ACH versus a System Check. 
    Append (ACH) to the end of the vendor organization name to assist with creating the bulk payments. (Organizations > List > List tab > Edit Pencil Icon)
    This will make it easy to select the ACH vendors for payment.




  4. Create Vendor User Defined Fields under number 9 and 10 for the Bank Routing Number and the Bank Account number. 



  5. Add ACH routing and bank account numbers into the vendor profile (Organizations > List > Edit Pencil Icon > Vendor Profiles (left menu) > Edit Pencil Iconvia the Other tab. Ensure that the actual Vendor Name shows in the PAYEE NAME(S) field on the Vendor Profile.



  6. Work with a Unanet Business Consultant to customize a Vendor Payments export template to the specific NACHA file format required by your bank.

Transaction Processing

Once you have entered Vendor Invoices and are ready to pay those vendors via the ACH process, follow the steps below to create and transmit the ACH payments.

1 - Process and Post the Payment in Unanet

Process and Post the payments. Processing payments for ACH is similar to the System Check process.

More information on the system check generation process can be found here: AP Admin Guide - Print Check.


1.1 - Create the Bulk Vendor Payment Creation

Select the ACH vendors for bulk payment by using  %ach in the ORG NAME field. 
Select the ACH BANK ACCOUNT and the ACH PAYMENT METHOD.






1.2 - Select the Vendors and Create Payments 

Select the check boxes for the vendors for which you wish to create payments.

Click Create Payments, then select the List tab.

  


1.3 - Complete Check Printing Options

Make a note of the FIRST CHECK NUMBER used as you will need this when you run your NACHA file. Select the List tab.


1.4 - Select Payments and Generate Checks

Select the check box(es) and click Generate Checks.




1.5 - Download and save the PDF as your Remittance Advices

Download the file(s) then click Process Printed Checks.




1.6 - Process Checks and Complete Check Generation

Select the desired check box and click Complete Check Generation.



2 - Create the NACHA file to transmit into the bank's online portal.

After all Vendor Payments have been posted, run the the bank-specific export template (Admin > Export) to create the NACHA file. You probably created this template customized to your bank's requirements with a Unanet consultant.

In the export criteria:

  • Enter the STARTING CHECK NUMBER that you noted above.
  • Use % to filter the BANK ACCOUNT field and select the ACH bank account.
  • DOCUMENT DATE: Choose "Today" as most often you transmit the payments to the bank on the same day they are processed in Unanet.
  • Select the check box for Posted payments and click Run Export.


3 - Once the NACHA file is generated, download the file and transmit it to your bank following your specific bank instructions.


Bank Reconciliation

Even though a separate Unanet Bank Account is used when processing ACH payments, the Operating Account-ACH and Operating Account are both reconciled in the same bank reconciliation. This is because both Bank Accounts use the same Account Number.

How do I know which checks are included in the bulk ACH sweep on my bank statement?

These checks can be determined via Check Print History:

  1. Navigate to Financials > Accounts Payable > Check Print History.
  2. Filter by BANK ACCOUNT (Operating Account - ACH) and CHECK DATE (date the checks were posted in Unanet), then select the List tab.
  3. Match the SELECTED TOTAL amount to the sweep amount on your bank statement.
    1. The FIRST CHECK NUMBER and LAST CHECK NUMBER tell you the check range included in that ACH sweep.


Additional Information

Help Docs - Vendor Payments

Help Docs - Bank Account Setup

KC - AP Admin Guide - Print Checks

KC - Balanced NACHA file

KC - FAQ - How can EFT payment advices be printed for distribution?

KC - Quick Topic - How can I share or upload an export template?


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