ACH Payments

For those of you FFLs who have payment terms of “On Account” or “Net 30” with your distributors and other vendors, are you still paying these merchants the old-fashioned way…by cutting Accounts Payable checks when bills come due in 30 days? Maybe it’s time to take your business into the modern era by paying your merchants via ACH/EFT.

Automated Clearing House / Electronic Funds Transfer consists of a file generated by your FFLAssist application, which you then send directly to your bank. Your bank then disperses the funds electronically to your vendors.

Using Accounts Payable checks can be a headache. You need to decide if you are going to use preprinted checks or use blank check stock marked up by your computer application at print time. Checks can get jammed in the printer. The printer can run out of toner. You could run out of check stock right in the middle of a check run. And don’t even think about using a Deskjet-style printer for A/P checks, as too many checks get rejected by banks when Deskjet printers are used. The reason for the rejection is because the routing and account numbers are not MICR…tiny magnetic particles in the ink allowing the bank’s check machines to read those data elements. Any one of these scenarios can cause fits for your Accounts Payable team.

ACH/EFT is right out of the box with FFLAssist. It only requires a minimal amount of setup. Simply contact your bank and ask them to send you their “NACHA” file layout, the acronym which stands for National Automated Clearing House Association. This is a standard layout format that all banks across the U.S. use, with minor layout tweaks. Then send that file to the FFLAssist team. We can generally have your system configured and ready to go in about an hour after receiving that NACHA layout. Upon final setup, you simply send the bank a test file to see if they accept the file as laid out. If the bank accepts the test file, you are ready to rock!

If your bank requires the initial data transmission test to be a “penny test,” FFLAssist accommodates that, too. A penny test is a test file that contains only a single payment for an amount of one penny.

Then, reach out to your merchants and ask them if they are willing to receive your payments electronically. If they agree, have your merchants give you their bank’s routing number and their bank account number with that bank. Your bank needs to know which bank to send the funds to (routing number) and which account to deposit the funds into (account number). You will assign these two pieces of information as part of the vendor record as a one-time setup.

With FFLAssist, you will be your A/P team’s rock star!