Understanding NetSuite’s Electronic Fund Transfers

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The Electronic Fund Transfer is a payment method that is becoming increasingly popular amongst businesses that deal with customers or other businesses. As you can see in the following graph, there was a boom in popularity in the past 5 to 6 years.

 

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EFT trends for B2C EFT trends for B2B

 

To keep up with this new demand, NetSuite now offers a module that enables the Electronic Fund Transfer payment. However, there are some limitations depending on the version chosen (Standard or One World), and depending on where in the world the business is situated. You can see a detailed list of the EFT formats available, per country, in the following images.

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In Detail

Using the module is really simple. First, you must enter the bank information of the business account in which you want to make the deposit or pay a bill from. Second, you need the bank information of the customer with which you want to do business. Following these steps, you can use the module to look at the invoices or bills that are eligible to be paid with this method, and follow the steps to create the Payment File that will be used. As soon as the file is created, you can send it to your bank through their internet portal, and in return, the bank will give you a Bank File that will be used by NetSuite to reconcile the transactions and make everything balance. Those are the step needed to go from setup to a basic reconciliation. The module can offer more options for a business that would like to use this module on a bigger scale.

The module also offers a Batch payment option. You can configure a batch payment for a certain bank to go off at a predetermined time and pay a selected invoice. For example, you could go ahead and configure the batch to pay all the bills from a certain vendor on every Monday at 7 o’clock in the morning. This option is normally used by larger companies, with a lot of vendors, that would like to automate some of their payment processes.

One other option that could go in pair with the Batch payment would be the approval routing. When this option is activated, you must now re-enter your bank information to ensure that your bank configuration remains valid. This option gives another layer of security before a file is sent to the bank and changes status in NetSuite. The way it works is as followed: you set up different layers, with each taking care of their own range of batches.

For example, we have three Users and the configuration goes as followed :
– User 1 takes care of batches under $10 000.00;

– User 2 takes care of batches between $10 000.00 and $25 000.00;

– User 3 takes care of the rest.

A batch payment of 12 500.00$ would require the approval of User 2 before going through as scheduled. This way, it prevents big batches from going “under the radar” and not being approved because they were programmed to follow a specific schedule.

 

Conclusion

This module is for any business that already uses Electronic Fund Transfer with another system, and would like to simplify its workday by integrating this workflow in NetSuite. Alternatively, it is also ideal for a business that would like to make the jump to EFT payment as a mean of streamlining its workflow by minimizing the use of cheques or other paper methods.

 

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Understanding NetSuite’s Electronic Fund Transfers

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