Electronic funds transfer is a convenient way to process payments as it reduces the time to process payments and helps avoid fraud. This is a walkthrough on how to setup and process ACH files in Dynamics 365 Finance (and Operations).

To use ACH feature in Dynamics 365 F&O, we need the initial setup of:

• Bank account
• Vendor bank account
• Method of payment
• Prenotes (optional)

Bank Account Setup

1. Navigate to Bank Accounts and specify the following information:
   1. in the General tab:
      • Bank account
      • Routing number
      • Bank account number
      • Main account – posting GL account.
      • Currency
      • Company statement name – legal entity name on the bank statement
        
   2. in the Additional identification tab:
      • Company ID
   3. If Pre-notes are used, in the Payment management tab:
      • select the Prenotes required field.
      • Prenote response days
   4. in the Address fast tab
      • Bank account address

Vendor Bank Account Setup

1. Navigate to Vendor record tab > Setup > Bank accounts > enter the following information:
   • Bank account
   • Name
   • Routing number
   • Bank account number
     
2. To set the created bank account, navigate to All Vendors > Payment tab > choose your Bank account

Method of Payment Setup

1. Navigate to Method of Payment page. Enter the following fields:
   • Method of payment
   • Description
   • Payment type
   • Account type as Bank
   • Payment account
   • Export format as NACHA (US)
2. Assign to Vendor Card under the Payments fast tab.
   
3. In the Method of payment page, navigate to Payment specification. This step allows to classify the Standard Entry Class Codes within ACH export NACHA formats, which will be transmitted into bank. CCD and PPD are the most common formats used.
   • Cash Concentration and Disbursement (CCD) is used when creating payments from vendor accounts.
   • Prearranged Payment and Deposit (PPD) is used when creating payments from consumer accounts.
4. Method of payment > Payment specification tab > +New. Enter Description and Export format as Standard NACHA-CCD

To set the created Payment specification, navigate to All Vendors > Payment tab > payment specification

Prenotes Setup

A prenote is used to test the zero-dollar bank transaction (test transaction) – it’s verified and sent before the actual real funds are used through the Automated Clearing House (ACH) network.

1. Navigate to Accounts payable module > Periodic > Create prenotes > populate the fields as needed.

Payment Process

1. Navigate to Vendor payment journal > create a new line > select the Generate payments.
   1. On the payment method, choose ACH (or electronic)
   2. On the export format field, choose NACHA (US)
   3. Choose your Bank account. OK.
      
2. Ok > choose the parameters as needed.
   
3. The Remittance document will generate. See sample below.

If you have any questions about the ACH feature or how to maximize your Dynamics 365 Finance investment please reach out to us at Suppor@BondConsultingServices.com or schedule a consultation with one of our ERP experts.