Electronic Payments using EDI 820 - checks and ACH?
Today, all vendor payments are done via a single check run on Friday. Physical checks are printed (generally 500 - 600 per week) by the AP staff, stuffed and mailed.
We are currently looking at implementing a more efficient process where we pay vendors electronically instead of via paper check from our AP department. We have many small, mom-and-pop vendors who may not be interested in electronic payments so we will still have some paper checks to distribute.
The solution suggested by one of the banks competing for our business (we are looking at a new commerical bank as well) is to supply the bank with consolidated payables in a single file which will include both ACH electronic payments as well as payments which should be made via a check. The bank will then cut the checks, stuff them and distrubte them to the vendors who can not or do not want electronic checks and also make the ACH payments to those who elect to have electronic payments.