Setting Up Direct Supplier Payment

Objective

The Direct Supplier Payment option facilitates the work of customers who wish to pay their suppliers by bank transfer.

When a disbursement is entered in maestro*, the system differentiates the suppliers that should be paid using a cheque from those that should be paid by bank transfer. During a direct payment, maestro* creates a file that is read and processed by your financial institution.

A payment confirmation is then sent ti the supplier through the Contact Management option.

If emailing is impossible, maestro* allows you to send payment confirmations directly by fax using Microsoft Fax or Fax by Email.

You can use a solution that does not require the Contact Management module, but this requires you to use other communication products, such as FaxMaker (used for sending faxes), if you must send payment confirmations by fax directly. The payment confirmation form by fax will be created in Text mode (viewer 1) without attributes (bold, italics, etc.).

Specifications concerning the generation of the NACHA (U.S.) file can be found at the end of this document, in the Appedix.

Summary

Before You Begin
Necessary Settings
Appendix
- Specifications for Direct Supplier Payment in the United States (NACHA)

Before You Begin

List of bank institutions that are supported in the current maestro* formats for direct supplier payment:

Supported Banks
Bank of Montreal Bank of Montreal (old format) CIBC Bank CPA005 (1464) CPA005 (1464) Multi-Accounts CPA005 (1464) with Trace No. Canadian Western Bank Desjardins Bank HSBC (ascii old) HSBC (ascii) Laurentian Bank National Bank National Bank (old format) Royal Bank Scotia Bank TD Bank (80 Octets) NACHA (National Automated Clearing House Association)

If your financial institution is not in the list of banks compatible with maestro* but it accepts the CPA005 (1464) format, you will be able to make direct payments to your suppliers.

Necessary Settings

Cheque Format Configuration

maestro* > Maintenance > General Maintenance > Processing > Cheque Format Configuration

Set up your cheque as usual.

For information on the different fields in this option, please refer to the latter's online help (F1).

Select the form in the Direct Payment Form field.

This allows to indicate the customized payment confirmation form to use.

This form is only used to print Direct Payment cheque stubs.

Chart of Accounts

maestro* > Accounting > Maintenance > Accounting > Chart of Accounts

It is recommended to create a new Bank type, "transit", general ledger account to group all Transfer type disbursements. By using a transit account, only the disbursement amounts will be transferred to the bank reconciliation of your general bank account.

Enter a Number for this new account.
Write a Description (English or French).
Indicate the Group Code.
In the Type field, select Bank.
Indicate whether the account status is Accessible or Unaccessible.
Save and Quit.

For information on the different fields in this option, please refer to the latter's online help (F1).

Bank Accounts

maestro* > Accounting > Maintenance > Accounting > Bank Accounts

After creating the transitory general ledger account, you must link it to the bank account.

The following fields are those that must be completed to be able to make direct supplier payments. For more information on the other fields in this option, please read its online help (F1).

Enter the GL Account number we created in the previous section.
Indicate the bank account number in the field to this effect, as well as the Transit No.
Enter the Account Use.
In the Account Type field, select Bank.
Enter the Supplier Cheque Deposit Format and Counter.
Furthermore, you must select the Institution and enter a Transmitter No.

Depending on your financial institution, it might be required to fill in the Processing Center field.

The information entered here has to be the same as those entered in the current account since the direct payment file will be created with those information.

Supplier Management

maestro* > Purchasing > Maintenance > Suppliers > Supplier Management

To indicate that the suppliers wishes to receive their payment through a bank transfer, you must provide the necessary information in the Direct Payment tab of the Supplier Management option.

If the Contact Management Module is Installed

Enter the necessary information in the Payment Mode, Account Number and Transit Number fields. The Transfer option has to be selected in the Payment Mode field.
The confirmation method will be established according to the contact created in the Contact Management option.

Without the Contact Management Module

You must fill in the different fields under the Direct Payment tab. The Transfer option has to be selected in the Payment Mode field.

The Confirmation Fax or Confirmation Email fields have to be filled in according to the selected confirmation mode. All of the other fields have to be completed.

General Settings

Accounting

maestro* > Configuration > General Settings

maestro* > Accounting > Maintenance > Accounting > Configuration

It is important to indicate the bank account for the direct supplier payment. To do so:

In the settings window, under the General Ledger option, select General.
Then, in the Purchases and Disbursements window, indicate the transitory account number in the Bank Account for Direct Payment Disb. field.

It is also possible to identify a bank account by currency for the direct payment to suppliers in the Currency Management option if the module is installed.

Purchasing

maestro* > Configuration > General Settings

maestro* > Purchasing > Maintenance > Purchasing > Configuration

It is also important to indicate the location where the direct supplier payment files will be saved.

In the configuration window, under the Purchasing option, select Payments.
Then, in the Payments section, enter the required information in the different fields.

Entering a supplier code in the Supplier for the transfer of payments field allows to perform the transfer automatically betweeen automatically between the transitory account and bank account when creating the direct supplier payment.

The Confirmation Form field is used to select a form that will automatically be sent to the supplier, when preparing the direct payment file. It can differ from the direct deposit form printed in the Print Cheques option.

Implementation

Make a Disbursement

maestro* > Purchasing > Purchasing > Payments > Selected Disbursements

When selecting the supplier, the system validates the supplier's payment mode.

For a bank transfer, the back account is automatically modified for the transitory bank account of supplier direct payments identified in the general settings.

Save the disbursement and transfer it.

Generating Payment Confirmations

maestro* > Purchasing > Purchasing > Payments > Print Cheques

Before proceeding to preparing the direct payment file, it is first necessary to print the bank transfer cheques slips.

In the Parameter Selection window, select the bank account linked to the payments.
Select the date of the direct payment.
Select the Print Direct Payments option in the scroll-down menu of the Action field.
Click on the Accept icon.
Check the box of every payment to print in the Selection column. An icon also allows to select all of them automatically.
Click on the Select icon.

The cheque form for the direct payment comes from the form identified in the Bank Account option, under the Supplier Cheque Deposit Format field.

Preparing the Direct Payments File

maestro* > Purchasing > Purchasing > Payments > Prepare Direct Payment File

The Prepare Direct Payment File option allows to prepare the file that will be processed by the financial institution to deduct the payment amount, as well as send the payment confirmations to suppliers according to the predetermined confirmation method (set in the Direct Payment tab of the Supplier Management option, or in the Contact Management option, if used).

In the Parameter Selection window, select the transitory Bank Account.
Enter the Payment Date.
Click on the Accept icon.
In the Prepare Direct Payment File window, select the direct payment to include in the file by checking she box in the Selection column. To check all payments to display in the grid, click on the Select All icon.
If the Contact Management module is used, click on the Edit Payment Confirmation by Email icon ton enter a text that will be shared when sending the payment confirmation by email. Otherwise, if the Contact Management module is not used, the text to include in the email that will accompany the payment confirmation must be entered in the Mailing Configuration option (maestro* > Maintenance > General Maintenance > Processing > Mailing Configurations).
Click on the Accept icon. It is at the step that the file is created and the payment confirmations are automatically sent.

Click on Ok. The maestro* viewer appears.
If the Contact Management module is used and if one is linked to supplier(s), a label indicating the contact person(s) and the file transmission method(s) will be highlighted in yellow, at the top of the window.
Click on the Print icon to print the payment confirmation.
Click on the Sent to all receipients icon before closing the viewer. It is at that time the software will send the payment configurations. It is impossible to redo this process after creating the file.

Review Disbursements Included to Direct Payments (If Needed)

The Direct Payment Revision option must only be used in rare occasions, when the financial institution informs a company that a problem makes it impossible to complete all disbursements included to the direct payments. Indeed, it may happen for multiple reasons that a payment is not fully completed (for example, if the transit number of one supplier is inaccurate in maestro*).

To remedy this problem, maestro* created a functionality to review disbursements included to direct payments. It allows to redo a direct payment file with the previously selected disbursements in the Prepare Direct Payment File option, but that were never successfully transmitted to the bank during the first payment attempt.

The Direct Payment Revision option allows changing the status of certain disbursements invluded in a direct payment file in order to include them once again in a new direct payment file.

maestro* > Purchasing > Purchasing > Pyaments > Direct Payment Revision

The review process of disbursements included to direct payments is similar to that of preparing the initial direct payment file.

In the Direct Payment Revision window, select the Bank Account set for direct payments.
Enter the Disbursement Date. This date is used to filter the displayed transactions. Maestro* will only display payments for which the disbursement date is on or before the selected date.
Click on Accept.
Select the transactions to process using the mouse. To select more than one transaction, press and hold the Ctrl or Shift keys. It is important to correctly select all transactions to include in the file. Furthermore, no validation can be performed on the selected disbursements. To avoid to transfer funds by mistake to a supplier that has already been paid, it is important to make sure to only select disbursements for which the first attempt failed.
Click on Select.

A confirmation message is displayed to confirm the status change of the selected disbursements to include them once again in a direct payment file.

Click on Yes.

This functionality does not modify the direct payment file. It only modifies the status if the selected disbursements to make them available once again for direct payment. Furthermore, the functionality does not generate a new direct payment file. To include the disbursement in a direct payment file again, it is necessary to Prepare a (new) Direct Payment File.

In the Configuration option (Payments section of the Purchasing module), if a supplier has been entered in the Supplier field used to transfer direct payments, maestro* reverses the entry that was automatically made when preparing the direct payment file. If no supplier was specified, no reversal entry will be performed.

Transfer the Total Amount of the Direct Payment from the Transit Bank Account to the Actual Bank Account (Optional)

Let's remember that this last step, that completed the direct payment process, must only be performed if:

A supplier code has not been entered in the Supplier for the transfer of payments field of the Configuration option (Purchasing module, Payments section), AND
A transitory bank account has been created to perform direct payments (in the Necessary Settings).

maestro* > Purchasing > Purchasing > Payments > Enter a Direct Disbursement

In the Enter a Direct Disbursement window, select the "bogus" supplier used for the direct payments in the Supplier Code field.
Change the date if so needed.
Enter a reference number in the Cheque No. field (for example, it could be PDIRECT... maestro* even accepts to have the same dummy cheque number more than once).
Complete the breakdown grid by entering the internal bank account number to debit, as well as the total amount of the direct payment file. This total will also be displayed to the right of the Purchase field.
If applicable, modify the bak account so it displays the real company operations bank account.
Select the nature of the disbursement in scroll-down menu of the Type of Direct Disbursement field: 1 - Standard.
Click on the Save icon.

The disbursement is added to the Summary of Non Transferred Transactions section. It is also now possible to transfer the transaction directly through the Enter a Direct Disbursement option by clicking on the Transfer icon, or view in advance an entry that will be generated through the List of Disbursement option. Finally, the disbursement can also be transferred through the Transaction Transfer icon in the maestro* main menu.

Appendix

Specifications for Direct Supplier Payment in the United States (NACHA)

Contrary to what one would think, there are no additional configurations to set up to be able to generate a complete and correct NACHA file. However, it is important to make a precision concerning the configurations in the Bank Accounts option.

Multiple institutions are available for Canada, but only one is supported for the United States in maestro*. It is very important to select it to be able to proceed with the direct supplier payment.

maestro* > Accouting > Maintenance > Accounting > Bank Accounts

In the Bank Account window, select the NACHA - National Aut. Clearing House Ass. option in the Institution field.
Make sure to correctly fill in all the other fields in this option, following the information provided earlier.