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NEACH’s Journey Towards Electronic Payments

By Sean Carter AAP, APRP, NCP posted 05-06-2020 09:14

  

NEACH, as you know, has been promoting the use of the ACH Network for close to 50 years and expanded our offerings over the last ten years to all thing’s electronic payments.  What you may not know about NEACH is that internally we have been very dependent on checks for both our A/R and A/P processes.  I had a vision when I became President & CEO, and that vision was to change that process immediately.  It did not change immediately, and that was due to a couple of errors in judgment. Most notably, our process and systems were literally written out of a check processing playbook.  The other issue to our check process was our fraud controls. From the approval of an invoice, all the way to the cutting and signing of the check.  Our team knew the process and the auditors liked it. 

The team would have to change, and our auditors would need to see the same level of control. We’ve processed ACH payments over the years for things like staff and board travel reimbursement, and also have companies that debit us like Nacha and American Express. That was minimal and didn’t really represent my vision.

I am happy to say we are making substantial progress on moving away from paper checks both on the A/R and A/P side.  The rest of this post will focus on how we did it. Our systems and controls were challenged like everyone else in the middle of March when we had to leave the office for an unknown amount of time. 

The bills keep coming, and we are still providing support, so we need to continue making and receiving payments. These are our steps and how we’ve been managing to restructure the process:

  1. Recognize that as a business, your comfort zone is processing checks (For good reason, the process and controls are tried and true.)
  2. Gain an understanding of the different types of payments that you can use to pay bills or receive money (Credit Card, Wire Transfers and of Course ACH)
  3. Realize that you will need to continue writing some checks, and you must have Positive Pay set up for your accounts.
  4. Contact your financial institution and gain an understanding of all of the security offerings they have—Positive Pay for Check and ACH, Credit Only Accounts, etc.
  5. Adopt a new payables process that allows you to still keep controls for approval authority (even under unusual circumstances like everyone being remote). Once your approval process is secure, then clearly communicate the process to your team. The controls set up on your account allow for switching payment systems to be smooth and risk-averse. 
  6. For money owed to you, think about the cost of credit card processing vs. the process needed to open up ACH Credit Only accounts. Once you have the credit-only account set up, proudly display it on invoices, registration forms, and product order forms. 
  7. Celebrate the successes! Understand that the minor inconveniences like approving a Positive Pay item and having to reconcile the new credit only account are just replacing some of the inconveniences you came to except in processing checks. As Dalton said in Road House “It is amazing what you can get used to.”
  8. Monitor your account multiple times a day. This step has nothing to do with the story, but it is valuable advice. 

I want to thank my team and our banking partners. I also want to thank those of you that are now paying us via the credit only account, and by credit card for your registrations and publication orders.  We still are not at 100%, but we are much closer than we were before. 

I truly hope that our story can help you inspire some of your customers to continue the migration towards electronic processing.  “That is our process” is what kept us from making substantial changes to how we create and receive payments.  I suspect that is the case for a lot of your customers.  Have them call me, and I will help them find their way.

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