FedACH + FedPayments® Reporter Service = More Value

By Robert Williams, product development director, Retail Payments Office, Federal Reserve

How can you help local healthcare providers adopt electronic payments sooner than later? Simply enable these customers to utilize electronic, business-to-business (B2B) automated clearing house (ACH) transactions that contain payments and other payment-related information.

Identifying challenges

While many organizations already have EDI-capable accounts payable systems that generate ACH payments that carry related payment information, some vendors may be unable to read (or unwilling to accept) the ACH EDI formatted payment information. Therefore, business customers are sometimes unable to match payments to accounts receivable entries. This lack of accompanying payment information—or the inability to interpret it—can significantly hamper efforts to convince your business customers to make payments electronically.

Offering a solution

As a solution, the Federal Reserve Banks offer FedPayments® Reporter, an enhanced EDI and report service, which allows you, as the receiving depository financial institution (RDFI) for your business customers, to easily provide reports of the payment information accompanying FedACH items. The payment-related information carried in the EDI transaction fields can include the following:

  • Payor and payee
  • Amount paid
  • Invoice number and date
  • Purchase order
  • Total invoice amount
  • Discount taken, if applicable

Once this payment information is presented in a readable report for your healthcare customer, the payment can be matched to open accounts receivable entries. As the financial institution for the receiving business or vendor, you can automatically generate reports on a fixed schedule. You can also direct FedPayments Reporter to automatically send an encrypted e-mail of the EDI reports to your providers or vendor customers. FedLine Customer Access Service is an online self-service functionality that makes it simple to set up and administer reporting without installing standalone software.

Creating value and efficiency

Once the initial setup is completed, FedPayments Reporter will do the rest by potentially eliminating a significant amount of manual backroom processing for the RDFI. For the provider, the human readable accounts receivable payment information can be made available much earlier in the day while reports are safely stored in an encrypted e-mail portal that is easily retrievable by authorized staff. The automation available with FedPayments Reporter creates value for you and your business customers

Automating processes

The latest enhancement to FedPayments Reporter provides many other reports on an automated basis. FedPayments Reporter searches an originating depository financial institution’s (ODFI) FedACH files for any notification of change (NOC) and returns and automatically generates recurring reports. This helps ODFIs monitor and improve origination quality and manage ACH operations. A machine-readable data file of the EDI information is also available to RDFIs. The file can be integrated into the provider’s accounting system, allowing for seamless matching of open accounts receivable entries. This will allow for straight-through processing and can generate significant efficiencies for the receiver of FedACH payments. To learn how FedPayments Reporter can create value for you and your business customers, visit FRBservices.org or contact your Federal Reserve account executive via My FedDirectory.

Readers might also be interested in the following article, “Three Step program for Help with Health Care.