This class continues the Payment Journal series by focusing on ACH (automated clearing house) payment processing in Business Central. While many of the payment journal concepts are similar to check payments, ACH payments require additional configuration and a specific processing sequence.

Creating ACH payment batches

Payment journals can contain an unlimited number of batches for different payment scenarios. When creating ACH batches, it is recommended to:

• Assign the appropriate bank account to the batch.
• Create separate ACH batches for each bank account.
• Use clear naming conventions such as BOAACH for a Bank of America ACH batch.
• Avoid frequently changing the bank account assigned to a batch.

Because only one bank account can be linked to an ACH batch, organizations using multiple banks should create multiple ACH batches rather than switching bank accounts within a single batch.

Required bank account setup

Before a bank account can be used for ACH payments, several fields must be configured:

• Bank Account Number
• Transit Number
• Country Export Format (typically US)
• E-Pay Export File Name with a numbering sequence, such as ACH0001
• Payment Export Format

The Payment Export Format must reference a valid format configured within Data Exchange Definitions. This setup is typically completed during implementation and may require assistance from your support team.

Generating ACH payment lines

To create ACH payments:

1. Open the ACH payment journal batch.
2. Select Suggest Vendor Payments.
3. Set the appropriate posting and payment dates.
4. Change Bank Payment Type to Electronic Payment.
5. Optionally filter by vendor or payment method code.
6. Generate the payment lines.

The resulting journal lines should display:

• The correct bank account
• Applied invoices
• A Bank Payment Type of Electronic Payment

Exporting the remittance file

After reviewing the payment lines, generate the remittance information:

1. Select Export from the payment journal.
2. Choose the desired output option.
3. Generate the remittance advice.

This step marks the ACH payment as processed for printing purposes and enables the next stage of EFT file generation.

Generating the EFT file

Once the remittance advice has been created:

1. Navigate to Actions > Functions > Generate EFT File.
2. Select the payments that should be included.
3. Enter the settlement date.
4. Generate the EFT file.

The EFT file is created using the Payment Export Format associated with the bank account. This file is then provided to the bank for ACH processing.

Sending vendor remittance advice

After generating the EFT file, vendor notifications can be sent directly from the payment journal. To send remittance advice:

1. Select Related > Payments > Send Remittance Advice.
2. Review the documents to be sent.
3. Send the remittance information to the vendor.

The remittance advice is typically attached as a PDF and delivered according to each vendor's document layout configuration.

Configuring vendor email settings

Vendor remittance emails are configured on the vendor record. Within the vendor card:

1. Open Document Layouts.
2. Configure Vendor Remittance.
3. Configure Vendor Remittance - Posted Entries if desired.
4. Enter the appropriate recipient email address.

These settings determine where remittance documents are sent when the remittance process is executed. Organizations should also verify that valid email accounts are configured within the Email Accounts setup page and that the sending account has appropriate permissions.

Posting the ACH payment

After all ACH processing steps are complete:

1. Post the payment journal.
2. Review the resulting ledger entries.
3. Confirm the batch has been cleared.

Posting creates the financial entries in the general ledger and completes the payment process.

Key takeaways

• ACH payments should be processed in dedicated batches tied to a specific bank account.
• Multiple ACH batches can be created to support multiple banks.
• Bank accounts require additional ACH configuration, including export formats.
• Generate the remittance advice before generating the EFT file.
• EFT files are provided to the bank for processing.
• Vendor remittance advice can be emailed directly from Business Central.
• Posting the payment journal finalizes the transaction.

Following the ACH process in the correct sequence helps prevent processing errors and ensures successful payment execution and vendor communication.