Electronic
Data
Interchange (EDI) is the electronic exchange of business
data from one computer to another in a standard,
machine-processable format.
02. What is FEDI?
Financial
Electronic
Data
Interchange (FEDI) is the electronic exchange of payment
instructions and remittance information using a standard format
facilitated by financial institutions.
03. What is ACH?
The
Automated
Clearing
House (ACH) is a funds transfer system governed by NACHA
rules, which provides for the interbank clearing of electronic
entries for financial institutions.
04. What is NACHA?
The
National
Automated
Clearing
House
Association (NACHA) develops and sets standards for
specific types of electronic fund transfers.
05. What are the benefits of electronic
payments?
- Increased security and reduction of errors – no more
lost/stolen checks
- Increased cash flow for vendors
- Increased timing and certainty of payment
- Vendors have immediate use of funds (financial institutions do
not place a hold on electronically transferred funds)
- Controls the timing of payments (no mail float and check
clearance)
06. How reliable and safe are electronic
payments?
The following are now non-issues when receiving your payments
electronically:
07. How does the electronic payment (EDI)
process work?
Initial Setup:
The vendor completes the Electronic Payment Agreement form, a
signed document authorizing the State of Alaska to make electronic
payments directly to the vendor's bank account. It includes
information required for the payment process, such as a bank
account number, addenda format information (i.e., remittance
advice), contact names, phone numbers, etc. It also authorizes the
State of Alaska to initiate debit entries and adjustments for any
credit entries made in error to the vendor's account.
The vendor submits the completed agreement to the Department of
Administration, Division of Finance, for verification and
processing. Once the form is processed, per ACH rules, the
Division of Finance sends a prenote, a zero dollar test
transaction to verify the accuracy of bank account information
before “live” payments are sent. This test usually
takes ten business days. During this period, state
agencies will not be able to send payments to the account
electronically. Once the prenote test has ended, state agencies
may process electronic payments in AKSAS. Payments are processed
daily with the exception of holidays, weekends, and special AKSAS
processing.
Transmitting Payment:
Electronic payments are transmitted to the state's banking
institution (i.e., Wells Fargo) by 10:00 a.m.
daily, excluding weekends and holidays.
When Wells Fargo (WF) receives the electronic
payment information for the state, they convert the information to
ACH entries. These entries are then transmitted electronically to
an ACH operator, a central clearing facility for ACH entries. The
ACH operator processes the entries received from WF and
transmits them to the vendor's financial institution.
Receiving Payment:
Upon receipt of the ACH entries, the vendor's bank posts
payment information to the vendor's account. Any addenda
information (i.e., remittance advice) associated with the payment
is provided to the vendor in the format previously agreed upon by
the vendor and the vendor's bank. Vendors may also need to
work with their banks to satisfy any requirements their banks may
have and make arrangements to receive remittance (addenda)
information.
Payment is deposited in the vendor's account on the first
business day, excluding weekends and holidays, following
transmission by the state. This is two business days after the
payment is processed in the state accounting system. For example,
if the payment is processed on Monday, the payment is transmitted
on Tuesday, and then deposited on Wednesday. If the state
processed a payment on Friday, and Monday is a holiday, the
payment is transmitted on Tuesday, and then deposited on
Wednesday.
08. When are electronic payments not
processed, transmitted, and deposited?
Payments are not processed on holidays, weekends, and during
special AKSAS processing. Transmission and deposits do not occur
on holidays and weekends.
Holidays:
Payments processed the business day preceding a holiday are
transmitted the first business day following the holiday and are
deposited the first business day after transmittal. The State of
Alaska observes most standard holidays. For a calendar of state
holidays, please refer to our standard
State
Calendar.
Columbus Day, the second Monday in October, is observed as a
holiday by the Federal Reserve, but not by other banking
institutions or the State of Alaska. Electronic payments
originally scheduled for deposit on Columbus Day (Monday) will
deposit on the first business day following the holiday (Tuesday).
Weekends:
Transmission of electronic payments and deposit of funds does not
occur on weekends. Electronic payment transactions processed on
Friday are transmitted the first business day following the
weekend and are deposited on the first business day after
transmittal.
09. What do I need to do to receive
electronic payments?
Fill out the
Electronic Payment Agreement form applicable for your type of payments, attach a voided check or savings deposit
slip, and mail or fax the form to us.
Information about the deposits you receive will appear on your
bank statement. If this information is not sufficient for you to
identify the payments, contact the ACH section of your bank to
make arrangements to receive complete remittance information.
10. When will I start receiving my payments
electronically?
Upon receiving the completed form, the State of Alaska sends a
prenote, a zero dollar test transaction to verify the accuracy of
bank account information before “live” payments are
sent. This test usually takes eight to ten business days.
Depending on your bank, you may or may not be notified that this
test was processed. After this test has been completed, your
payments will be received electronically.
11. What if my bank account information
changes?
If your bank account information changes and you want your
electronic payments to be deposited to the new account, fill out a
new Electronic Payment Agreement form, select “Change” in the
Banking Information section, and mail or fax the form to
us.
You may
mail the Electronic Payment Agreement form to:
State of Alaska
Department of Administration
Division of Finance
PO Box 110204
Juneau, AK 99811-0204
You may
fax the form to the State of Alaska at (907) 465-3798.
12. How do I stop receiving electronic
payments?
If you wish to stop receiving payments electronically from the
State of Alaska, please fax or mail us a memo with signature or
send an email
requesting to stop receiving electronic payments.
13. Where and how do I send the Electronic
Payment Agreement Form?
You may
mail the Electronic Payment Agreement form to:
State of Alaska
Department of Administration
Division of Finance
PO Box 110204
Juneau, AK 99811-0204
You may
fax the form to the State of Alaska at (907) 465-3798.
14. What if I receive an electronic payment
in error?
If you have received a payment in error, please call (907)
465-5622 or
email us.
Please provide the amount of the payment and the deposit date.
15. What is the EDI Payment Inquiry website?
The EDI Payment Inquiry (a.k.a. Vendor Electronic Payment Inquiry
System) allows vendors to view remittance information about the
electronic payments vendors receive from the State of Alaska. This
system is provided for the use of vendors who do business with the
state and who have requested that payments be deposited directly
to their bank account. If you are a vendor that does business with
the state but you do not currently receive payments
electronically, you will first need to sign up for this service by
completing an Electronic Payment Agreement Form.
For more information regarding the EDI Payment Inquiry, please
visit the
FAQ
Section on our
EDI
Payment Inquiry website.
16. Where do I find the ABA Number/Routing
Transit Number (RTN) that is required to complete the Electronic
Payment Agreement form?
For a checking account, you can find this number on the bottom
left of your check as a 9-digit number directly to the left of
your account number (see illustration below).
This number does not appear on a savings deposit
slip. If you would like your payments deposited into your savings
account, call your bank to obtain the ABA/RTN.
