Sage ERP MAS 90 & 200 version 4.4/4.5: Setting up ACH Electronic Payments for Accounts Payable

Were you aware that, in Sage ERP MAS 90 and 200 version 4.40, with the installation of Product Update 2, the ability to create ACH Electronic Payments was added to the Accounts Payable module as Sage Extended Solution AP-1063 was incorporated into the base program. Enabling this feature in Accounts Payable will allow you to increase your efficiencies, improve your cash management, reduce operating costs and lessen the risk of lost or stolen checks by paying vendors electronically using an ACH file created from the Accounts Payable module. This new feature, for those who did not own the extended solution, gives you the flexibility to select and set up one or more financial institution(s) for your electronic payments, and for each one you select, define the format and layout of the ACH file. The feature includes pre-note functionality, and flexibility in your electronic payment distribution, including options to allocate amounts between one or more accounts. ACH information on processed payments, historical information and vendors paid electronically is available on AP Reports. They can include auto checks, manual checks, voided checks, reversals, credit card transfers, electronic payments, wire transfer information in any combination.  

To set up ACH electronic payments in Accounts Payable Options

1.       Select Accounts Payable Setup menu > Accounts Payable Options. The Accounts Payable Options window appears.
2.       In Accounts Payable Options, click the ACH tab, and select the Enable ACH Electronic Payments check box.
3.       Use the remaining fields to define options for electronic payments.
4.       Click Accept.

ACH electronic payments are now set up in Accounts Payable Options.

To set up your banks for processing ACH electronic payments

It is important to obtain your banks’ requirements for how ACH files must be structured. Many banks accept the default selections in ACH Interface Maintenance, but some require you to manually modify the settings.

  1. Select Accounts Payable Setup Menu > ACH Interface Maintenance. The ACH Interface Maintenance window appears.
  2. In ACH Interface Maintenance, select the bank code to set up.
  3. On the Main tab, enter the information about your bank account. Select the Pre-Note Approved check box only after the bank has approved your pre-note submission.

    1. Immediate Destination: Type the routing/transit number and description of the receiving point to which the file is being sent. This is often your bank’s American Bankers Association (ABA) number; however, your bank may direct you to enter a different number.
    2. Immediate Origin: Type the routing/transit number and description assigned by your bank to identify your company’s ACH file or the sending point of the file. The 9-character field begins with the 4-digit transit number followed by the 4-digit ABA number and check digit. Your bank may direct you to enter your federal tax ID number at this field. (NOTE: If you enter a federal ID number in place of the routing/transit number, the first digit of the federal ID number must be entered at the Immediate Origin Leading Character field on the Records tab, and the 8 remaining digits and an additional alpha character must be entered in the Immediate Origin field.
    3. Originating DFI: This is the originating Depository Financial Institution routing/transit number for the bank issuing the ACH file on behalf of its clients. This field defaults to the first 8 characters entered at the Immediate Origin field.       Click the Records and Additional tabs to select options that determine how the ACH file is structured.

 The Records Tab


  1. Immediate Origin Leading Character: Type the leading character that goes before the immediate origin routing/transit number if required by your bank.
  2. Valid File ID Modifiers: Select a first and last character to create a range of valid characters for the file ID if required by your bank. Each time that an ACH file is created, the value of the file ID will be incremented by 1 within the specified range.
  3. File Creation Date: Select the date that will be used as the file creation date in the ACH file.
  4. Character to Precede Company ID: Type the character that your bank requires as the first character in the Company ID field before the company ID.
  5. Alternate Company ID Number: Type the company ID number required by your bank. If the bank requires the same federal ID number entered in Company Maintenance, you can leave this field blank.
  6. Alternate Company Name: If the bank requires a different company name than that entered in Company Maintenance, type that name here.
  7. Company Discretionary Data: Type additional company information if required by your bank.
  8. Company Entry Description: Type a comment if required by your bank.
  9. Pad File to Block Size: Select this check box if your bank requires that ACH files be generated as complete blocks of 10 records each.
    1. Select Block Size 9 or 10 as directed by your bank.
  10. Service Class Code: Type the service class code for the Batch Header record (record type 5) and the Batch Control record (record type 8) in the ACH file. The service class code identifies the classification of dollar entries to be exchanged.
    1. Code 200 if the ACH file will contain both debit and credit entries.
    2. Code 220 if the ACH file will contain only credit entries.
    3. Code 225 if the ACH file will contain only debit entries.
  11. Standard Entry Class: Type the class code to identity the transactions that will be transmitted.
    1. PPD for a prearranged payment and deposit.
    2. CCD for a cash concentration or disbursement.
    3. CTX for a corporate trade exchange.
  12. Descriptive Date: Select a date to use as the descriptive date in the ACH file.
    1. Run Date – Uses the computer’s System Date
    2. System Date – Uses the Accounts Payable Module date
    3. Effective Date – uses the date entered when printing vendor remittance advice forms.
  13. Zero Fill Settlement Date: Select this check box to add a 3-character settlement date to the Batch Header record. By default, the settlement date is 000. Clear this box if your bank requires that the Settlement Date field be blank.

The Additional Tab

  1. Include Internal Bank ID: Select if your bank requires that an internal bank ID be included as a record preceding the File Header (record type 1) in the ACH file. Clear the box to leave the File Header record as the first record in the ACH file. Type the required description in the field to the right. NOTE: if you select the Use 80 Byte Text as First Record check box, the description entered at this field will be the second record in the file.
  2. Use 80 Byte Text as First Record: Select this box if your bank requires you to enter text to be included as the first record in the ACH file. Clear if text is not required by your bank. Type the required description in the field to the right.
  3. Include Debit Record: Select this box if your bank requires a debit record for your company. An entry detail record will be created in the file after all of the vendor records. Your bank may use the term Balance File Format when a debit record is required.
  4. Transaction Code: If directed by your bank, type a transaction code to identify the debit record.
  5. Receiving DFI Identification: Type the routing/transit number to use for the debit record as directed by your bank.
  6. DFI Account Number: Type the bank account number to use for the debit record as directed by your bank.
  7. Individual ID Number: Type the individual ID number to use for the debit record as directed by your bank.
  8. Add CR/LF After Each Record:
  9. Note After selecting a bank code, you can click Copy From and select an existing ACH Interface Maintenance record to copy information for the currently selected bank code. For more information, see Copy From – Fields.
  10. Click Accept.
  11. Repeat the above steps for additional banks as needed.

Your banks are now set up for processing ACH electronic payments. To process ACH electronic payments, you must first set up the vendor to receive electronic payments.

  1. Obtain information from your vendors for ACH payment, including the account numbers and the routing/transit numbers.
  2. In Vendor Maintenance, select the vendor and enable the Electronic Payment check box and enter a Standard Entry Class.

  3. Click on the More button and select Electronic Payment from the menu.

  4. Complete the fields in the Vendor Electronic Payment window using the information from the vendor’s bank.

    1. The Pre-Note Sent and Pre-Note Date fields will be automatically updated when the Pre-Note Selection Register and Pre-Note Approval Register are updated.
  5. Click Accept.
  6. Repeat steps 2-4 for additional vendors as needed.
  7. Perform one of the following to access Pre-Note Selection Register.
    1. In the Vendor Electronic Payment window, click Pre-Note Selection Register.
    2. Select Accounts Payable > Pre-Note Printing menu > Pre-Note Selection Register
  8. In the Pre-Note Selection Register window, enter the date on which the pre-notes will be sent then click Print.
  9. When a message dialog box asks if you want to update the Pre-Note Selection Register, click Yes. The Pre-Note Sent field is changed to Yes and thePre-Note Date field is updated for each bank account in the Vendor Electronic Payment window.
  10. Select Accounts Payable Pre-Note Printing menu > Generate Pre-Note ACH File. The Generate Pre-Note ACH File window appears.

  11. Make any necessary selections, then click Proceed. ACH files will be created for each bank code and stored in the location defined at the ACH Electronic Payments Folder field in Accounts Payable Options.
  12. Follow the instructions provided by your bank to transmit the ACH file to them for pre-note approval. The approval process varies by bank, but can take approximately 10 to 15 business days.
  13. Once approval is received, select Accounts Payable Pre-Note Printing menu > Pre-Note Approval Register. The Pre-Note Approval Register window appears.

  14. Enter the date the pre-notes were sent and the pre-note approval date. The approval date must be at least 10 days later than the sent date. Click Print.
  15. Click Yes to update the Accounts Payable Pre-Note Approval Register. The Pre-Note Sent field is changed to Approved and the PRE-Note Date field is updated for each approved bank account for the Vendor.

You can now process ACH payments and pay those vendors electronically. In my next post, we’ll cover the actual processing of ACH payments for the A/P module.

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