Automating Accounts Payable and Increasing Direct Deposit Enrollment

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

4

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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2

3

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

7

6

4

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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6

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?





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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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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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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

http://www.nacha.org/

http://www.directdeposit.org/

http://www.directpayment.org/

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Automating Payments: Payables and Payroll





Thank YouPresented by:

Kimberly Feeney, Vice PresidentBank of America231 S. LaSalle StreetMail Code: Il1-231-06-12Chicago, IL 60697(312) [email protected]

Automating Accounts Payable and Increasing Direct Deposit Enrollment

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