| Electronic Funds Transfer |
Electronic Funds Transfer (EFT) is the electronic transfer of funds utilizing either the Automated Clearing House (ACH) network (domestic) or SWIFT wire (international) for the purpose of making payment to a supplier. Today neutralizing cash float when converting from checks to Electronic Funds Transfer is approximately five days.
Customer Impacts
- Selection of financial institution with EFT capability
- Accounts Payable system to generate EFT transmission detail
- Communication network to transmit to financial institution
- Establishment of business practices (EFT contract agreement) with the supplier that support and promote EFT process
- Determining the cash float neutralization period i.e. due date + X days
Supplier Impacts
- Commercial bank account
- Establish a process to receive detail remittance advice
- Establishment of business practices (EFT contract agreement) with the customer that support and promote EFT process
Customer Benefits:
- Eliminates check processing
- Reduces forms, stationary and storage costs
- Reduces clerical personnel
- Reduces mail cost
- No canceled checks
- Reduces bank processing cost
- Simplifies bank reconciliation
- Improves cash management
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Supplier Benefits
- Reduces clerical personnel in cash application
- Provides more data for A/R analysis
- Generates fewer exceptions
- Expedites problem resolution
- Eliminates “check in the mail” syndrome
- Improves cash management/forecasting
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Soltec provides Electronic Funds Settlement Best Practices education to both business professionals and executives in both web enabled and on-site formats. Please contact Soltec to setup an educational session or to understand how Electronic Funds Settlement Best Practices can improve your organization’s financial performance. |
