Click on the questions below to see their corresponding answers.
Electronic Funds Transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, through computer-based systems and without the direct intervention of bank staff.
Financial Electronic Data Interchange (FEDI) is the electronic exchange of payment instructions and remittance information using a standard format facilitated by financial institutions.
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.
The National Automated Clearing House Association (NACHA) develops and sets standards for specific types of electronic fund transfers.
Electronic payments are much safer than warrants – the following are now non-issues:
In the Reference Materials section on the EDI Homepage for State Fiscal Staff, please refer to the online Accounting Procedures Manual (APM) Section 8: Payments, and look for the Electronic Payments (EDI) link under Section 8. Also refer to the EDI Quick Reference.
The AKSAS reference of “GEN” must be used on EDI payments, otherwise, you will receive an error message. In addition, information on the GEN line will be transmitted to the vendor's bank statement, so please include descriptive/identifiable information on the GEN line.
Per the AKSAS Vendor Detail screen below, if the Multiple Addenda Allowed field says “Y” for yes, then you can use several “GEN” references on a single warrant paying several invoices (or contracts, grants, etc.) If the Multiple Addenda Allowed field says “N” for no, then you can only use one “GEN” reference per warrant. You may continue to use any other reference on either multiple or single addenda warrants to identify your grants, lease, contracts, etc., but information on these references will not be transmitted to the vendor's bank statement.
Refer to the AKSAS Vendor Detail screen below. A vendor is set up for electronic payments when the EDI Status field says D – EDI CAPABLE or R – EDI REQUIRED. A vendor has not been set up for electronic payments if the EDI Status field says NOT EDI CAPABLE. If you have access to the Statewide Vendor Directory, refer to the EDI column on the far right. If the field contains “Y” for yes, then the vendor has been set up for electronic payments.
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 eight to ten business days. During this period, state agencies will not be able to send payments to the account electronically. At the AKSAS Vendor Detail screen (below), if the EDI Status says I – IN PROGRESS, then the vendor's account is undergoing the prenote test. The prenote test ends one day after the date in the ENABLE DATE field. From there, state agencies will be able to make payments electronically to the vendor's account.
There are daily hard copy EDI Prenotification reports available for you to request. These reports are:
Refer vendors to our EDI website and have them fill out the Electronic Payment Agreement form online. By filling out the form online, there are online edits in place to ensure that all fields are filled out entirely by the vendor. However, if the vendor does not have access to the internet, you may send them a copy of the form by fax or mail.
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 eight to 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.
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.
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.
Payments are not processed on holidays, weekends, and during special AKSAS processing. Transmission and deposits do not occur on holidays and weekends.
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).
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.
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) 465-2169.
NOTE: Only the full amount of an EDI deposit can be reversed. If more than one payment is made to a multiple addenda vendor on a single day, the EDI deposit is for the full amount of all multiple addenda payments. A portion of the EDI deposit can not be reversed. The vendor will have to be contacted to issue a refund to the State.
If you paid the wrong vendor, the Division of Finance is responsible for reversing the payment. Once an incorrect payment has been made, you need to let us know within five business days of the original payment's reconciled date (see screen print below). If we get this notification within this time frame, the Division of Finance can process an ACH transaction to request the reversal of that payment.
However, if the notification is not received within five business days of the original payment's reconciled date, the Division of Finance will use another method to recover the payment called a Return Per ODFI. A Return Per ODFI is a “voluntary” transaction in which the Originating Depository Financial Institution (ODFI) requests the return of a payment from the Receiving Depository Financial Institution (RDFI). To clarify, the State of Alaska's ODFI is First National Bank of Alaska for electronic payments, while the RDFI is the vendor's bank.
Keep in mind though that under a Return Per ODFI, the RDFI is under no obligation to return the monies paid, but may do so at its discretion. So it is critical that you contact the Division of Finance immediately if you paid the wrong vendor. If you paid the wrong vendor, please email us with the following info:
Per ACH rules, the vendor must be notified of a reversing entry and the reason for it no later than the reconciled date of the reversing entry. Before we begin the reversal process, we ask that you contact the vendor to let them know that you have made a payment in error, and that the State of Alaska will be processing a reversal on the vendor's account.
The Division of Finance will keep you posted on the reversal process and will let you know when you may re-issue payment.
When creating transactions for EDI warrants, agencies often enter duplicate reference lines. One of these references is for providing data to the recipient's bank, (i.e., GEN reference), and the other is for AKSAS warrant inquiry by reference. For example, you might enter a GEN and an INV reference with the same invoice number, etc. To help mitigate the need to enter this duplicate information, a set of special reference types was created. Entering one of the reference types will create a pair of references, one EDI and one not, on the transaction. This is known as the copy reference function.
If the vendor record is setup for EDI, and it shows a vendor as multiple addenda “N” (No), then only one of the copy references can be used per EDI warrant. If the vendor record is setup for EDI, and it shows a vendor as multiple addenda “Y” (Yes), then any number of copy references can be used per EDI warrant – the only limit here is you have 180 total reference lines per warrant.
By pressing F12 with the cursor on the PVN reference number line, the vendor record will be displayed, to identify if the PVN is set up for EDI and whether they have single or multiple addenda lines.
By using the copy references (listed below) in place of standard references, AKSAS will copy the complete reference line into a GEN reference line. Please note that the copy reference function works for both EDI and non EDI vendors.
Please note that the copy reference function is just a copy function. If the user needs to change a warrant's references, then they need to correct both the AKSAS inquiry (i.e., ACC, GRT, INV, TA, LSE, BIL, STM, and CUS) and the EDI reference lines (i.e., GEN). AKSAS will not make the corrections for the user. For example, if the user simply corrects the special reference (as in +NV), then AKSAS will again copy over the updated line, resulting in an out of balance warrant transaction. The user could also delete both reference lines if they need to correct reference data.
If the user happens to use all the available reference lines using the copy reference function, but hasn't allowed enough room for the duplicate references to populate the fields, the system will simply stop the warrant from processing with the out of balance, and the EDI specific references required error messages. It's doubtful, however, that a user will insert data on all reference lines.
The V route code encourages the use of EDI when making vendor payments, especially from batch interface transactions. If a “V” is given as the warrant routing code, the batch processor will process the warrant as an EDI warrant when the vendor is EDI capable. If the vendor is not set up for EDI, the warrant will be processed as a regular printed warrant. Having this “either/or” code will permit users to generically request EDI without having to track a given vendor's EDI status.
If the V route code is used, the text “WRNT ROUTE V” is found in the comment field of the 18th reference segment of a warrant. In addition, the bolded text “PER VENDOR REC” will display directly below the text “MAIL” or “ELECTRONIC PMT” on the base screen or PF5 of the warrant detail inquiry screen. Examples showing this are in the screen prints below.
Some points to remember for the V Route Code:
The employee will need to fill out an EDI Payment Agreement Form specifically for State employees.
Please note that a vendor record (PVN) must exist in AKSAS before Division of Finance can set up the employee for EDI. Please do not submit this form to Division of Finance until a vendor record has been set up. Please note this form is only for reimbursements and travel per diem payments made to an employee through the State Accounting System (AKSAS). Payroll direct deposit is handled separately through your agency's payroll contact.