Transcript Document

Automating Accounts Payable
and Increasing
Direct Deposit Enrollment
Presented by:
Kimberly Feeney, Vice President
Government Treasury Services
Bank of America
312-828-2582
Agenda
 Automating Payables: Options
 Outsourcing Check Processing
 Automated Clearing House
 Wire Transfers
 Commercial Cards/Purchase Cards
 Direct Debits
 Direct Deposit
 How it Works
 How to Increase Participation
2
Automating Payables: Why?
What are the benefits to your District?
 Reduced Costs
 Straight-through processing
 Minimizes redundant data entry
 Greater
 Data accuracy
 Access to data
 Information sharing
 Creates stronger partner relationships
 Frees up resources
3
Automating Payables:
How is this possible?
 Enhanced Technology
 Internet
 Integrated Financial Systems
 Trusted and Knowledgeable Partners
 Alternative Payment Options
 Automated Clearing House
 Wire Transfer
 Purchase Card . . .
4
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)
5
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
6
Outsourcing your Check Processing
1
File of
Payments
2
Your School
District
Check Production Service
Check
Production
Software
1
District creates a file of payments
2
District transmits the file to your Bank
3
Transmission of file to check production utility
4
Checks printed and mailed
5
A listing of checks produced is sent to your Bank
6
A Check Issuance file is passed to Positive Pay
7
Mailed checks are delivered to vendor
8
Vendor deposits check at local bank
9
Bank compares checks received
against Issuance to make Pay/No Pay decision
Positive
Pay/Reconcilement
Software
6
Issuance
File
9
Vendor’s
Bank
3
Transmission
of Checks
Print-run
Data
8
5
US MAIL
4
Check Production Utility
7
Checks
Vendor
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
8
Automated Clearing House (ACH)
(3)
(2)
District’s Bank’s ACH
system
(1)
(5)
Your District’s accounts
payable system
ACH NETWORK
Your Vendor’s
Bank Account
(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.
District’s
Vendor
(4)
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 delivery
 Online
10
Domestic Wire Transfers
(2)
(3)
District’s Bank’s Wire
Transfer System
(1)
(3)
FEDERAL RESERVE BANK
Your Vendor’s Bank
Account
OUTGOING WIRE TRANSFER
(1) The District creates an ACH file for processing
(4)
(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.
Your District’s accounts
payable system
District’s Vendor
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
12
Automating Payables: Direct Debits
to the District’s Payables Account
 Electronic funds movement
 Reduces processing expenses
 One time set-up
 Increases
 Flexibility
 Productivity
 Fraud protection (Blocks/Filters)
 Improves cash forecasting
 Better payment control
13
Automating Payables: Why?
What are the benefits to your District?
 Reduced Costs
 Straight-through processing
 Minimizes redundant data entry
 Greater
 Data accuracy
 Access to data
 Information sharing
 Creates stronger partner relationships
 Frees up resources
14
Direct Deposit
 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
15
How Direct Deposit Works
 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
16
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
17
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
18
How to Boost Enrollment
 Create a plan of action
 Human 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 stolen
 Use internal newsletters to promote and educate
 Invite your local financial institution to set up an
information booth
19
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
20
Common Direct Deposit
Pain Points
Obtaining Employee Bank Account
Information

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
21
Transforming your
Payroll Approach: Payroll Cards
 Card-based solutions enable School
Districts to offer electronic payments to
part-time or un-bankable employees
 Payroll cards are re-loadable
 Can be transmitted to your bank in the same file
as direct deposits
 Widely accepted
 Custom logos are available
22
Transforming your
Payroll Approach: Group Banking
 Partner with your local Bank
 Offer 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
23
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
24
Marketing Resources
Your servicing bank
Your payroll vendor
Review guidelines and information at
the following websites:
• www.nacha.org
• www.directdeposit.org
• www.directpayment.org
25
Automating Payments:
Payables and Payroll
What are the benefits to your District?
 Reduced Costs
 Straight-through processing
 Minimizes redundant data entry
 Greater
 Data accuracy
 Access to data
 Information sharing
 Creates stronger partner relationships
 Frees up resources
26
Thank You
Presented by:
Kimberly Feeney, Vice President
Bank of America
231 S. LaSalle Street
Mail Code: Il1-231-06-12
Chicago, IL 60697
(312) 828-2582
[email protected]