Accounts Payable with ACH Origination

Back Office Section Heading Accounts Payable with ACH Origination

This document outlines the process and functionalities of Accounts Payable with ACH Origination within the FLEX system.

1. System Requirements

To utilize Accounts Payable with ACH Origination, your Credit Union must have the following modules enabled:

  • Accounts Payable (GL-1000)
  • ACH Origination (OP-1500)

2. Accessing Accounts Payable

Accounts Payable functionalities are located within the FLEX Main Menu:

  • Navigate to GL/Accounting
  • Select Accounts Payable

Within the Accounts Payable section, you will find:

  • Reports
  • Accounts Payable Configuration
  • Accounts Payable Imaging
  • Purge History File

3. Vendor Setup for ACH Origination

Before processing ACH Origination payments, vendors must be properly configured.

3.1. Locating Vendor Settings

  1. Access Accounts Payable Imaging.
  2. Click on the Vendors tab.
  3. Select the desired Vendor.
  4. Click Edit or double-click the Vendor entry.

3.2. ACH Origination Tab Fields

The ACH Origination tab contains critical transaction values for the vendor. These fields allow for customization of Accounts Payable fields or the addition of new vendors with different configurations.

  • Use ACHO:
    • A checkbox indicating if this vendor is enabled for ACH Origination.
  • Company:
    • A dropdown list displaying all available ACH Origination Companies (excluding those associated with Member Generated transactions).
  • Transaction Code:
    • Credit-only codes indicating how the receiving institution will post the transaction.
    • Common codes include:
      • 22: Deposit for checking, NOW, and share draft accounts (credit).
      • 32: Deposit for savings accounts (credit).
      • 42: Financial institution general ledger (credit).
      • 52: Loan account (credit).
  • Transaction Description:
    • This description will be included when the ACH Origination file is sent, covering both the debit from the posting GL and the credit to the offset GL.
  • DFI Account Number:
    • Required field indicating the Depository Financial Institution account number.
  • Receiving DFI ID:
    • Required field indicating the Receiving Depository Institution ID.
  • Individual Name:
    • Required field indicating how the receiving party identifies the individual.
  • Individual ID#:
    • Required field indicating how the receiving party identifies the individual.
  • Discretionary Data:
    • Informational field only.
  • Addenda Information:
    • Informational field that automatically populates with the Invoice number.

3.3. General Ledger (GL) Account Setup

The general ledger account used for ACH Origination is located within the Vendor Information tab, under Payment Details.

  • This GL account will be credited when the invoice is posted and debited when the ACH Origination file is sent.
  • FLEX recommends creating a new GL specifically for these transactions, though an existing GL can be used.
  • Example: GL Account 87000, Description: Accounts Payable ACHO.

3.4. Filtering ACH Origination Vendors

Vendors configured for ACH Origination can be easily filtered within Accounts Payable Imaging by setting the “Filter by Type” to Only ACHO Vendors.

4. Adding an Invoice for ACH Origination

Once a vendor is set up for ACH Origination, an invoice must be added through Accounts Payable Imaging in the Unassigned tab.

4.1. Indexing Information

  • Vendor: Select the vendor configured for ACH Origination.
  • Invoice Date: Enter the date of the invoice.
  • Invoice Number: Enter the invoice number. This number will also appear in the Addenda Information of the ACH Origination record and will be sent to the receiving party.
  • Assign To: Indicates the teller ID to which the invoice will be assigned. This field automatically updates with the teller ID that approves the invoice.
  • Approval Date: This field remains blank until the invoice is approved, then populates with the approval date.

4.2. Payment Details

  • GL Account: Indicates the general ledger that will be credited until the ACH Origination is processed.
  • Description: Optional field for a custom description for the general ledger when the invoice is posted.

4.3. Invoice Information

  • Description: Optional field to enter additional description for the invoice.
  • Payment Date: Enter the date the invoice is to be paid. The invoice will only post if the effective posting date is equal to or after this date.
  • Due Date: Indicates the due date of the invoice.
  • Branch: Auto-populates based on vendor setup. Optional field to assign the invoice to a specific branch.
  • Frequency: Select the frequency code for invoice payments, if applicable.
  • Bank: Used to pay the invoice from a different bank number, if applicable. This is only for credit unions utilizing multiple banks for general ledger payments.
  • G/L Transfer Date: This field is not used for ACH Origination invoices.

4.4. Invoice Amounts

For ACH Origination invoices, ensure the following:

  • Amount Type: Must be set to ACH Origination.
  • Invoice Amount: Enter the total amount of the invoice.
  • Credit Amount: Enter the amount of the invoice to be credited (deducted).
  • Term Discount: Enter the amount of the invoice to be discounted.
  • Previously Paid: If a partial amount was previously paid in FLEX, the system will track and update accordingly, deducting the amount from the Invoice Amount field.
  • Pay Later: If a partial amount is being paid, enter the remaining amount to be paid at a later date.

4.5. Tax Reporting

  • Report to IRS: Select whether the invoice is subject to Tax Reporting.

4.6. Notes

  • Notes applicable to the invoice can be added here.

4.7. Invoice Tab

  • An image of the invoice may be scanned and stored.

4.8. Allocation Tab

  • Indicates the debit general ledger(s). The allocation of debits to the general ledger(s) must equal the invoice amount for the invoice to post successfully.

5. Posting the Invoice

After the invoice has completed any necessary approval processes, it will appear in the Approved tab in Accounts Payable Imaging.

5.1. Verification with Worksheets

  • It is recommended to run worksheets to verify how the invoice will post before proceeding.
  • Example: Detail Posting Worksheet for ACH Origination invoice.

5.2. Posting Process

  • Invoices can be posted individually, or the Post All option can be used to post all invoices with an effective date equal to or greater than the invoice posting date.
  • ACH Origination invoices post like any other invoice and can be posted together.
  • A new column for Invoice Type has been added and can be used for filtering.
  • Once posted, the record can be viewed in ACH Origination Processing.

6. Voiding ACH Origination Invoices

  • ACH Origination invoices cannot be voided directly; the option will be greyed out.
  • To reverse a transaction:
    1. A manual entry must be made.
    2. The record must be deleted from ACH Origination.
    3. If the invoice was marked “Yes” to “Report to the IRS”, the field should be unlocked and changed to “No” to prevent it from being reported.
    4. The notes field in Invoice History can be used to document any details pertaining to the voided item for future review.

7. Helpful Reports

The following reports are available to assist with Accounts Payable and ACH Origination processes:

  • Invoice Posting Report Details – PB116AP1
  • ACH Invoices Posting Report – PB116AP2
  • Multiple Invoices Posting Report – PB116AR
  • Exception Invoice Posting Report – PB116AQ
  • Posting Worksheet – APPOSTWRK
  • ACH Origination Detail – AO5000R
  • ACH Origination Posting Exceptions – ACHOEXCPT