Electronic Banking for Businesses

Written By: Bob Callanan of Business Ready Solutions

from April 9, 2013

There are many, varied impressions and ideas of what electronic banking is and what it can mean to an individual or an organization. In the personal banking world, some people think about accessing a bank web portal to pay utility bills, schedule a recurring mortgage payment, or maybe schedule an amount to be transferred to a savings account each month. Others may think of having a pay check automatically deposited by an employer. Using a credit card to process a payment online is another common example.

For most individuals, these tools have made banking easier because people are less dependent on getting to the bank when it is open or ensuring the mail gets delivered on time. Banks benefit because transactions are not automated from beginning to end – they have far fewer transactions to manually transfer from paper to the system. However, businesses seem to be slower to adopt these tools and instead stick with the tried and true approach of using paper checks and making daily trips to the bank for deposits.

Some of the challenges may be in determining which party benefits enough to take on the task. In the personal banking space, both parties benefit, but banks recognized the potential efficiencies to be gained as well as the potential competitive edge it would provide and as a result made the investment to move it forward. Business consumers certainly are not motivated to pay vendors quicker – but businesses do want to be on-time and want the process to be cost effective. Suppliers want to offer tools to customers that make it easy to order and easy to pay – it quickly becomes a competitive advantage.

Microsoft Dynamics GP includes a number of tools that will help organizations move toward more automated solutions for banking needs. A brief review of each follows.

EFT for Payables Management (EPM): EPM is a straightforward tool that allows payments to be made to vendors by submitting an electronic file to the bank. The setup process is very straightforward – use the configuration window to map the file to the bank’s requirements, populate each vendor’s EFT bank information, confirm the configuration with the bank and it is ready to go! It is not all or nothing, either. Organizations may choose to pay subcontractors or process employee expense reimbursements using this approach and continue with paper checks for everyone else.

EFT for Receivables Management (ERM): ERM can really benefit companies that need the ability to directly debit a customer’s account. This is very common if debiting a fixed amount each month from a customer and there is required authorization to do that. Similar to the EPM set, the module can be up and running in just a few hours.

Electronic Reconcile: The electronic reconcile module is ideal for companies with a high volume of bank transactions and the need to reconcile their bank statements more frequently than once per month. Using this module, a customer would download bank activity from the bank’s website and then import the data into Microsoft Dynamics GP. E-reconcile will attempt to match each transaction to what is recorded based on amount, vendor/customer, and date. Exception reports help the user quickly complete the reconciliation process.

Safe Pay: Safe Pay is the Microsoft Dynamics GP tool that answers a common requirement for many banks regarding Positive Pay. Banks today often require businesses to submit each day’s bank activity. The bank then uses the data to compare checks that are presented to the bank. The Safe Pay module includes a configuration screen that allows the mapping of the file to the bank’s specific requirements. Once configured, the module is ready to be used.

In addition to these tools are a number of powerful ISV solutions that provide a significant competitive edge that a supplier may need to grow the business or to simply compete. An example is the Online Bill Payment solution from Azox. This solution offers an interface where customers can connect to pay outstanding invoices while the data seamlessly integrates into the Microsoft Dynamics GP Sales Order Processing and Receivables Management modules.  There are many other ISV products with unique approaches to automating the payment process.

Be sure to include your Microsoft Dynamics GP partner in the discussion around electronic banking competitive advantage so they can best direct your organization to the right tool for the job.