Post on 30-Dec-2015
description
Automating Accounts Payable and Increasing
Direct Deposit Enrollment
Presented by:Kimberly Feeney, Vice President
Government Treasury Services
Bank of America
312-828-2582
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Agenda
Automating Payables: OptionsOutsourcing Check ProcessingAutomated Clearing HouseWire TransfersCommercial Cards/Purchase CardsDirect Debits
Direct DepositHow it WorksHow to Increase Participation
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Automating Payables: Why?
What are the benefits to your District? Reduced Costs
Straight-through processingMinimizes redundant data entry
Greater Data accuracy Access to data Information sharing
Creates stronger partner relationships Frees up resources
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Automating Payables:How is this possible?
Enhanced Technology Internet Integrated Financial Systems
Trusted and Knowledgeable Partners Alternative Payment Options
Automated Clearing HouseWire TransferPurchase Card . . .
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Automating Payables: What are your District’s Options?
Outsourcing your Check Processing Automated Clearing House (ACH) Wire Transfers Commercial/Purchase Cards Direct Debits: (initiated by your vendor)
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Automating Payables: Outsourcing your Check Processing
Eliminate internal security issues Elimination of equipment repair, maintenance
and upgrades Reallocation of resources Check issuance file can be integrated with
your Bank’s positive pay & reconcilement services
ChecksCheck Production Utility
File of Payments
CheckProductionSoftware
PositivePay/Reconcilement
Software
Print-run Data
Transmission of Checks
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5
4
7 Vendor
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Vendor’sBank
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Issuance File
A listing of checks produced is sent to your Bank
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5
2
1
3
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District creates a file of payments
District transmits the file to your Bank
Transmission of file to check production utility
Checks printed and mailed
Mailed checks are delivered to vendor
Vendor deposits check at local bank
Bank compares checks received against Issuance to make Pay/No Pay decision
A Check Issuance file is passed to Positive Pay
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US MAIL
Your School District
Check Production Service
Outsourcing your Check Processing
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Automating Payables: Automated Clearing House (ACH) Credits Electronic funds movement Increased
Flexibility Productivity Fraud protection
Accommodates vendor invoices data Better control Easier reconcilement & cash forecasting Electronic Advices Flexible initiation methods
Data file delivery Online
Simple
Automated Clearing House (ACH)
District’s Bank’s ACH system
ACH NETWORK Your Vendor’s Bank Account
District’s VendorYour District’s accounts
payable system
(1) The District creates an ACH file for processing
(2) The District’s Bank’s ACH system processes and delivers the ACH transactions to the ACH Network.
(3) ACH Network delivers ACH payments to your vendor’s bank.
(4) Vendor’s bank posts ACH payments on the settlement date.
(5) The District’s Bank’s ACH system reports ACH processing confirmation to the District.
(2)
(1) (5)
(3)
(4)
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Automating Payables: Wire Transfers
Electronic funds movement Better control Finality of settlement Provides immediate availability of funds Extensive security features to guard against
fraud Flexible initiation methods
Data file deliveryOnline
Domestic Wire Transfers
District’s Bank’s Wire Transfer System
FEDERAL RESERVE BANK
District’s Vendor
(1) The District creates an ACH file for processing
(2) Your District’s Bank’s wire transfer system processes and delivers the wires to the Federal Reserve.
(3) Your District’s Bank delivers Fed Reference numbers to your Bank’s Information Reporting System.
(4) Wires are paid to the District’s vendors.
OUTGOING WIRE TRANSFER
(2)
(3)
(4)(1) (3)
Your District’s accounts payable system
Your Vendor’s Bank Account
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Automating Payables: Commercial/Purchase Cards
Multi-purpose Single source for managing purchases Streamlines payments process Flexible billing and payment options Pre-defined spending controls State-of-the-art
Fraud detection Security monitoring
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Automating Payables: Direct Debits to the District’s Payables Account
Electronic funds movement Reduces processing expenses One time set-up Increases
FlexibilityProductivityFraud protection (Blocks/Filters)
Improves cash forecasting Better payment control
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Automating Payables: Why?
What are the benefits to your District? Reduced Costs
Straight-through processingMinimizes redundant data entry
Greater Data accuracy Access to data Information sharing
Creates stronger partner relationships Frees up resources
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The Electronic Transfer of a Payment From your District’s account into the checking
or savings account of your Employees. Most Popular Applications
• Direct Deposit of Payroll• Expense reimbursements
Direct Deposit
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Your Employee signs a Direct Deposit of Payroll authorization form. Form signed once - provides the account number, transit
routing number, and other information about the employee (Voided Check)
Your District will send an ACH origination file Your bank will send the file through the ACH Network.
This file should be sent at least two days prior to the Effective Date /Payday. (Effective Date is the date the funds are credited/debited from the account)
The Receiving Bank will post the credit transaction to the employee’s account on the effective date
How Direct Deposit Works
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Win-Win for Both Employer and Employee
Employer Benefits Reduces office costs in labor,
paper, and storage space One of the easiest benefit
programs to implement Easier account reconciliation in
comparison to check payments Reissuing costs regarding lost
or stolen checks are done away with, including stop payment fees
Streamlines payroll to one application
Employee Benefits Paychecks are electronically
deposited into any type of account and available for spend on payday
Saves employees’ time – no more waiting in lines at the bank
Employees know that the money is always there on payday without exception, reduces overdrafts
Payment stubs can be printed for employees with their pay information
No cost to employees Eliminates missed checks for sick
and vacation days
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Common Direct Deposit Pain Points
Persuading Employees to Enroll
Prefer to receive the paper check – routine of depositing the “paycheck”
The number one reason of those surveyed that have access to Direct Deposit and do not use it, is a perceived lack of reliability
Other reasons include having control over finances
Uneasiness with technology and security with it
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How to Boost Enrollment
Create a plan of actionHuman resource and payroll departments are key to
promoting Direct Deposit Educate employees on the benefits of Direct
Deposit Saves time and the enhanced security of a check
never being lost or stolenUse internal newsletters to promote and educate
Invite your local financial institution to set up an information booth
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How to Boost Enrollment cont. Use eye-catching Direct Deposit inserts to
anyone receiving a paper check Have existing employee advocates of direct
deposit spread the word Keep authorization forms within easy reach Make direct deposit the preferred payment
method If allowed - mandate it
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Common Direct Deposit Pain Points
Obtaining Employee Bank AccountInformation
Part-time or temporary employees – hard to setup a recurring electronic deposit
Employee does not have a bank account
Employee does not know how to give correct bank account and transit routing number information
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Card-based solutions enable School Districts to offer electronic payments to part-time or un-bankable employeesPayroll cards are re-loadableCan be transmitted to your bank in the same file
as direct depositsWidely accepted Custom logos are available
Transforming your Payroll Approach: Payroll Cards
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Partner with your local BankOffer checking accounts to employees
• Demonstrates your commitment to your employees
• Increased employee satisfaction – which leads to greater productivity
Excellent Employee Benefits: free checking, free online banking, special discounts on mortgages, interest paid checking accounts
Transforming your Payroll Approach: Group Banking
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Common Direct Deposit Pain Points
Need assistance with Marketing Plan
Do not have an internal marketing plan
Need sample brochures and direct deposit authorization agreement
Do not have a common area to market effectively
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Marketing Resources
Your servicing bankYour payroll vendorReview guidelines and information at
the following websites: • www.nacha.org• www.directdeposit.org• www.directpayment.org
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Automating Payments: Payables and Payroll
What are the benefits to your District? Reduced Costs
Straight-through processingMinimizes redundant data entry
Greater Data accuracy Access to data Information sharing
Creates stronger partner relationships Frees up resources