Positive Pay check data functionality

Positive Pay is a check fraud prevention program offered by most banks to their commercial customers. The programs use technology to reduce risk and potential liability. Nowadays, a distributor may be held liable for fraudulent check losses. Under a Positive Pay program, you send a standard set of check data to the bank regarding checks you are writing to vendors. When that check is being cashed, the bank compares the check being cashed with previously transmitted check data. The bank does not release funds for a check unless the amount and the payee match the check data that is provided. The bank notifies you about any discrepancies, according to the agreed upon procedures, and withholds payment until notified by you to release funds or reject the check.

A standard set of check data required by your bank may include: bank account number, check type (issue or void), check date, check number, check amount, payee name, and a transaction or reference number.

Distribution SX.e provides functionality to enable you to participate in your bank's Positive Pay program. Check data can be collected on all Accounts Payable checks issued or voided. Two Positive Pay output methods are available to send this check data to your bank:

CenPOS: Check data is collected and sent through an integrated web service connection to the CenPOS payment gateway application. CenPOS is responsible for managing the different bank formats and ensuring that the check data is delivered to the bank in the format appropriate to their program.
ION: Check data is collected loaded into a custom ION BOD, sync.SXPositivePay, which is consumed by an external application that extracts and formats the data as required by your bank.

Prerequisites

Before implementing this Positive Pay feature, ensure that your bank offers a Positive Pay program. Determine what kind of system the bank uses and what check data they require. Determine if they can work with CenPOS or if they can consume and process BOD data through an external application. Determine if your bank handles voided checks as part of their program, and whether you want to include voids as part of the program.

Note: Reprinted checks are not supported in conjunction with the Positive Pay feature. If you must reprint a check, then we recommend you void and reprint a new check. Do not reprint the same check. For processing a vendor payment other than a check, we recommend you use the Electronic AP payment remittance feature.

Planning and coordination is required to ensure your check data can be accepted. You should modify your workflow so your procedural tasks are relevant to your bank's Positive Pay programs, regardless of method you choose: CenPOS or ION.

Be aware that the Positive Pay feature in Distribution SX.e is not a method of payment. This feature does not send check data directly to banks. Rather, check data is made available for the organization through the CenPOS or the ION BOD external application that sends the data to the bank. If you select CenPOS as the Positive Pay Output Method, then the check data is sent through your CenPOS interface. You are responsible for working with CenPOS to ensure that the data is formatted and transmitted correctly. If you select ION as the Positive Pay Output Method, then you are responsible for implementing an application that consumes the BOD and formats the data to meet the bank’s requirements.

Workflow and processing

Normal check-print workflow starts with running the Vendor Cash Requirements Report as a stored report. This report recommends which AP invoices should be paid based on current posting dates, open invoice due dates, and discount dates. The Vendor Cash Requirements Report output should be reviewed and any changes to the recommendations should be made through Vendor Edit Payment Selection Entry.

After all changes have been made, the Vendor Entry Pay Invoices Due Report is run with the Vendor Cash Requirements Report stored report job name. This report updates AP records and creates the appropriate journal postings. Then, the Vendor Entry Check Print Report is run with the journal number from Vendor Entry Pay Invoices Due Report. This report prints the checks based on Vendor-specific and related SA Administration-Administrator Options settings. At this point, the Positive Pay functionality is executed immediately following the printing of the check. This ensures that the bank receives the check data before anyone can present the check to be cashed.

If you intend to include voided checks, the recommended workflow is to use CR Check Center Entry, where you can void a check. From Quick Entry, you can void a single check or a range of checks. When prompted, you can decide whether General Ledger and Account Payable transactions should be reversed. If you reverse those transactions, then a journal is opened to update the corresponding postings. At this point, the Positive Pay functionality is executed immediately following the voiding of the check. As with the printing of the check, this ensures that the bank receives the check data before anyone can present the check to be cashed.

The validation logic begins automatically with the creation of a CR Check Center Entry transactional record; that is, the creation of a check or the voiding of an existing check:

Whether the bank the check is written on has a viable Positive Pay program is determined by the settings for this bank in CR Bank Setup.
If yes, the validation logic determines if a Positive Pay Output Method is selected. If either ION or CenPOS are selected, the processing logic is continued.
If this is a new check, the logic is continued.
Note: If another CR Check Center Entry transaction record can be found for the current bank number and check number, the validation logic assumes the current check is a reprint, and the check is not processed for Positive Pay.
If the current check is a voided check, the logic determines whether voided checks allowed by this Positive Pay setup. If yes, then the logic is continued.
Next, logic specific to the creation of the ION BOD or the passing of data to CenPOS is executed. In both cases, the required set of check data is collected from the CR Bank Setup bank record and the CR Check Center Entry transaction record.
- If CenPOS, the data is collected and loaded into data fields that are sent through the CenPOS web service connection. CenPOS provides the URL required to access their ProcessCheck method, which receives the XML document.
- If ION, the data is collected, the sync.SXPositivePay custom ION BOD is created, and the BOD is sent to the bank's external application.

Note: Each CenPOS call contains check data for only one check. One call for each check in your check run. Each SXPositivePay BOD contains check data for only one check. One BOD for each check in your check run.

Note: Although most checks are printed through Vendor Entry Check Print Report, the Positive Pay feature handles manual checks created in Vendor Invoice Center Entry or GL Transaction Entry. The feature handles single or multiple checks voided in CR Check Center Entry.

Feature activation and setup

Activation and setup tasks vary depending on the Positive Pay Output Method you select. Processing must be successfully tested prior to implementing Positive Pay in a production environment.

If you are activating the CenPOS option, you must:

Work with a CenPOS representative to obtain your assigned Merchant ID, Merchant User ID, Merchant User PW (password), and Positive Pay Processing URL.
Ensure the standard set of check data is mapped correctly between Distribution SX.e and CenPOS parameters through the web service connection.
Select CenPOS as the Positive Pay Output Method in CR Bank Setup and specify the CenPOS Processing and Positive Pay settings.
Note: Because the CenPOS method uses a specific web service, a SA Credit Card Processor Setup record is not required. The connection information is stored on the CR Bank Setup record.

If you are activating the ION option, you must:

Work with the ION BOD external application representative to ensure the application can consume the sync.SXPositivePay BOD.
Ensure the standard set of check data is mapped correctly between Distribution SX.e and the external application.
Enable the option, Use ION Inbox/Outbox, in SA Administration-Administrator Options-Integrations-ION Interface Options-ION Company Settings.
Specify the Positive Pay settings in CR Bank Setup.
Note: Because the ION method uses a custom BOD unique to Distribution SX.e, the sync.SXPositivePay BOD is not set up in SA Administrator ION Noun Setup.

Tracking Positive Pay check data

You can use CR Check Center Entry to view which checks have had Positive Pay check data collected. If the Positive Pay Output Method value is set to either CenPOS or ION in CR Bank Setup for the bank specified in the CR Check Center Entry Search function, then the date and time when a check drawn (printed or voided) on that bank is stored. That date/time stamp is displayed in two places:

In the Positive Pay column in the Checks grid on the Reconcile tab.
In the Positive Pay column in the Transactions grid on the Transactions tab.

Use the Filter By criteria to help you search for specific checks or transactions. Use the grid's sort capability to sort by the Positive Pay column. If the Positive Pay column does not have a date/time stamp, either the bank does not offer a Positive Pay program or the check was created prior to your implementing the Positive Pay program.

To review or troubleshoot ION method-related check data, you can access SA ION Inbox/Outbox Inquiry. Use the search function to filter for the ION Noun, SXPositivePay. From the grid, drill down on a specific record to view the XML data sent in the BOD. For additional information about a specific BOD, you can also use Infor Ming.le tools, such as ION Desk, to track and review BOD details.

Use the CR Master Bank List Report to view all static information contained in your CR Bank Setup records for the selected bank numbers. After you set up bank records, print this report to verify the information. These related fields are displayed on the report: Positive Pay Type, Positive Pay URL, and Positive Pay Void.