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?
- Savings in the cost of warrants, postage, and envelopes
- Increased workplace efficiency
- Increased security and reduction of errors – no more
lost/stolen warrants
- 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?
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.
08. How do I know which AKSAS reference to
use on an electronic payment?
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.
09. How do I know if a vendor has been set
up for electronic payments?
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.
10. What is the prenote test?
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:
- Report B87201 – Vendors Pending
Prenotification (A list of vendors with prenotes in progress)
- Report B87202 – Vendors Enabled for Payment
(A list of vendors that became EDI capable)
11. I want to pay a vendor electronically,
but they are not EDI CAPABLE. What do I do?
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.
12. 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 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.
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.
13. 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.
14. If I receive an Electronic Payment
Agreement Form, where and how do I send it?
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.
15. What if I paid the wrong vendor or made
a duplicate payment?
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:
- Vendor Name
- Vendor Number
- Warrant Number
- Warrant Amount
- The reason for the stop payment request
- When you contacted the vendor about the erred payment
- Name and number of the person you contacted
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.
16. 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.
17. What is the copy reference function?
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.
18. What is the V route code?
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 V route code can only be used for an internal (i.e.,
general) warrant request.
- A real vendor number must be supplied. Temporary vendor numbers
cannot be used.
- The EDI reference of “GEN” must be used at least
once on the warrant.
- If the vendor is EDI capable the amounts found on all GEN
references must add up to the total amount of the warrant.
19. A state employee would like to sign up
for electronic payments. What do I do?
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.
