EFT Configuration in Sage X3: Simple, Efficient and Powerful!

Electronic Funds Transfer (EFT) is becoming a more common payment method in our everyday personal banking. Remember the last time you transferred money to your friend? Was it done in a swipe through your mobile app or did you go to the bank physically? With ‘beneficiaries’ set up in your online banking account, the complete process of cash transactions could happen in a few seconds – without the intervention of a bank teller!

If our personal banking benefits from such an easy interface, imagine the same requirements from the business world passing hundreds of transactions.  Imagine how powerful and efficient your system would need to be to support this? Almost every business, whether small or large, is looking for easier methods of payments as it increasingly becomes difficult to handle/control large number of transactions. More importantly, companies have to ensure that the system is controlled with Fraud Risk Management to prevent fraudulent transactions such as the ‘ACH Fraud’.

With an ERP system implemented in your business, have you ever wondered how powerful it could be to initiate and control transactions? Yes, with an efficient ERP system like Sage X3, it is capable to initiate payments to your vendors and employees and process them without any assistance by a bank associate every single time. The transactions seamlessly become successful with the best security features in place provided by your bank.

If you’re using Sage X3, this article will help you implement EFT.  I will provide detailed explanations of how the Finance Module can be configured to get the best results in generating the ‘EFT File’, which is the file required by the bank to automate transactions as per the payment entries from your system.

Every bank has their own requirements for the ‘format’ of the EFT file to be readable/processable by their system. It is thus highly important that we seek these specifications (usually found in the bank’s website) before we start to configure X3 to generate the required information. Also, note that Sage X3 can support multiple banks – meaning multiple configurations can be done for various bank accounts, all functional at the same time!

Let’s walk through the steps in Sage X3 Version 7. Note that Version 6.5 also has the same functionality with respect to EFT functions that we will go through during the implementation procedure. It is recommended that the following steps are done sequentially in order to avoid missing any important configurations.

Step 1: Define a Payment Method

This will define a Payment Method that will associate to the Payment Entry Type and Bank Account in the next steps. A Payment Method will filter open items according to what is assigned to each vendor at the Supplier Master Setup.

Navigation: Common Data > BP Tables > Payment Methods

Minimal requirements: Payment Method Description, Legislation, and ‘Active’ state.

Step 2: Configuring the Bank File

This is the most important step of the complete EFT Configuration. As per the requirements set by the bank with a Standard format of the EFT file, this setup is done following the specifications mentioned. It is recommended to have a call with the bank to make sure you are picking the right format as some banks have multiple formats for different kinds of systems. Provide details about your ERP with high level requirements to help the bank associate direct you to the right format.

The configuration is done based on this format specifications mentioned above at Bank File function in Sage X3

Navigation: Setup > A/P-A/R accounting > Files > Bank

This step may require a Technical Consultant with expertise in 4GL Formulae to set the formula at various lines as per the specifications. The following shows the Bank File setup for RBC Bank. Usually each Bank file needs three entries – Header, Detail and Trailer. Some banks may have multiple Detail lines.

Step 3: Define a ‘Payment Entry Transaction’ type

This will define a type to select from the list during the Payment Entry. Usual types include ‘Automatic Check Payment’, ‘Check Receipt’, etc. This setup defines how your entry should flow through the validation steps before posting it to the General Ledger.

When you have multiple Bank Accounts, it is important that you need to create multiple ‘Payment Entry Types’, one each for your multiple bank accounts.

Payment Entry type will define the unique setup for which Bank Account the payment will be generated to. It also defines the EFT file format (discussed in Step 3) based on which the payment information will be generated.

Navigation: Setup > A/P-A/R accounting > Payment entry types

Select the Payment Method (discussed in Step 1) under this ‘General’ Tab

Check the various information that you would like to see on your ‘Payment Entry’ function. You may need to have the ‘Bank ID number’ (discussed later) checked so that you can see it in the Payment Entry.

Check ‘Remittances’ (to allow creation of Deposit records), ‘Bank File’ (an EFT file format we configured in Step 2) and Select the ‘EFT file format’ under the field ‘Electronic Medium’.

Step 4: Set up Bank Accounts

As mentioned earlier, Sage X3 can support full-fledged Bank Setup for multiple accounts. For the use of EFT, a few fields become mandatory to be filled in as highlighted below:

Step 5: Set up the Payment Terms

Setting up the Payment Terms is a part of the basic Financial Setup. For any Payment Terms specific to EFTs, make sure that the associated Payment Method is selected in the setup screen.

Navigation: Common Data > BP Tables > Payment Terms

Step 6: Supplier Master Setup

Navigation: Common Data > BPs > Suppliers

Minimal Requirements: The highlighted fields as shown below will be mandatory for a successful EFT Configuration.

• Select the Payment Terms defined in the previous step

• Select the Bank Account created previously

• Enter the Supplier’s Banking information under ‘Bank ID no.’ Tab

This is the end of EFT configuration. The following steps will explain the generation of the EFT file for Payment Entries made.

Step 7: Initiating an EFT Payment from Sage X3

There are two ways in order to create Payment Entries from the following functions:

• Payment/Receipt Entry

• Payment Proposals

Let’s do one sample from the complex approach – ‘Payment/Receipt Entry’ function

This function has a better control to manually select the Open Items and make Overpayments, Under payments, Partial Payments, etc.

As per the steps mentioned under ‘Steps’ tab of Payment Entry Transaction, the file will be generated.

Navigation: A/P-A/R accounting > Payments > Payment/Receipt entry

Pick the appropriate Payment Entry Transaction (as discussed in Step 3) and create a Payment Entry

Step 8: Generating the EFT File

Record the deposits using ‘Manual Remittance Creation’ function making an entry by pulling multiple Payment Entries to the selected ‘Bank Account’ and ‘Payment Type’. This creates a Deposit Number by Sage X3. The following example shows multiple payments for different vendors for the same Bank Account (RBC, in this case).

Navigation: A/P-A/R accounting > Remittances > Manual Remittance Creation

Once after creating a ‘Deposit’, you can go ahead in generating the Bank File by clicking the ‘Bank File’ function from the Right Panel List.

This will open a pop-up window asking you to confirm creation of the file. The file will be generated in the below mention Folder Address by default. Have a shortcut created in the Desktop as you will be frequently opening this Folder to access the generated file.

The boxed highlight in the path will be the X3’s Assigned Folder for transactions.

This folder will be a repository of the files generated on an everyday basis. Archive the files in folders by month/bank for better organization. In this case you will see files starting with R, RU, T and TU – specifying files of various Bank Accounts. The file(s) for the day then need to be uploaded into the Bank’s Website for the actual bank transaction to happen. In the testing phase, ask the bank associate to provide you sessions to test your file in the bank environment to check for any errors.

This setup is very efficient to initiate and process Deposits, Cash Transfers, Bill Payments, etc. and can save huge amount of operational time. It is highly secure and Fraud Proof, as the Bank rejects a file and fails a transaction if any of the required component doesn’t match with their records (or) due to wrong file formats.

I hope this will help your EFT implementation and troubleshooting. Please feel free to post your questions in the comments section below or simply call Mantralogix at 1-866-320-8922, and a Certified X3 consultant would be more than happy to help you!