Transferring Funds

This chapter provides an overview of the funds transfer process and discusses how to:

• Create and approve funds transfer templates.

• Manage funds transfer template approval.

• Begin funds transfer requests.

• Create electronic fund transfer (EFT) requests.

• Create fee entries for EFT requests.

• Create bank account transfers.

• Create deals transfers.

• Review repetitive transfers.

Understanding the Funds Transfer Process

Cash Management defines and supports these two funds transfer methods:

• Bank account transfers

  Bank account transfers are used by your organization to transfer money between banks that are on your organization's general ledger (from one of your organization's bank accounts to another bank account belonging to your organization). This could be a transfer between your internal bank accounts, between your external bank accounts, or between your internal and your external bank accounts. PeopleSoft defines the following two categories of bank account transfers:

  • External bank transfers are used by your organization to transfer money between banks that are on your organization's general ledger (from one of your organization's bank accounts to another bank account belonging to your organization).

  • Internal bank transfers are transfers between business units using internal banks and internal bank accounts that you have created for your organization.

• EFTs

  EFTs are used to transfer funds from your organization's bank to an external third party.

For bank account transfers and EFTs, you can send funds transfers from templates, as well as on an ad hoc basis. To minimize the amount of manual entry when sending these ad hoc funds transfers, you can complete recipient information from settlement instructions, such as when you are paying a vendor who provides occasional services.

Cash Management also includes repetitive transfer, draw-down transfer, and prenotification functionality. Repetitive transfers and draw-down transfers are preapproved agreements to transfer monetary amounts on a periodic basis. (The Federal Reserve Fedwire transfer system supports four types of Fedwire transfers: repetitive, semi-repetitive, non-repetitive or freeform, and drawdown. PeopleSoft funds transfer functionality supports all four transfer types.) There is not a funds transfer method as described above for bank account transfers and EFTs. The relationship of the involved parties determines whether a repetitive or draw-down transfer is in the form of a bank account transfer or EFT. A prenotification is a file sent to a debtor's bank to test if payments may be made to a creditor through a specified bank account. The creditor will not process a payment made through the debtor's bank account until a prenotification is sent and successfully processed.

Cash Management supports the following transfer types:

• A repetitive transfer is used when a company makes a transfer between the same debit and credit parties frequently.

  The parties involved may be your organization and your bank—or your organization, your bank, and a third party. The Originating Depository Financial Institution (ODFI) has a record of the debit and credit parties and receives electronic and telephonic instructions to make the transfer. The ODFI also assigns a unique identifier to each instruction template. The items communicated to the ODFI as part of the transfer consist of the unique identifier, the date of the transfer, and the dollar amount. Of these three items, only the date and dollar amount may be changed, which decreases the risk of misdirected funds.

• A semi-repetitive transfers is similar to a repetitive transfer.

  The difference is that you can also modify the transfer description, in addition to the amount and date information.

• A non-repetitive or free-form transfer is used for ad-hoc transfers; you can edit all fields.

• A draw down is a request sent by a company to an ODFI to initiate a wire transfer from its own account or another party's account at a Receiving Depository Financial Institution (RDFI).

  For draw-down transfers, the RDFI is the payor of funds. The RDFI requires that it have authorization for payment from the account holder—meaning the party being debited must preauthorize the transfer.

  Drawdown transfers are most frequently used as part of a company's cash concentration system. Organizations use cash concentration systems to consolidate many bank accounts (operated by individual areas in the organization) to a cash position in a single account.

  Drawdown transfers are also a subset of repetitive transfers. You can set up a draw-down transfer to be a repetitive transfer.

• A prenotification or "prenote" is an EFT Request used to verify that payments can be made to a creditor from the debtor's bank account. Prenotes are created using a transfer template. From the template you can create a prenote which is basically an EFT for a zero dollar amount. After settling the EFT, the prenote will then be processed via Financial Gateway like any other EFT. Prenotes can only be settled through Financial Gateway.

  In the case of ACH prenotes, if no return is sent back after a specified number of days, then the debtor can assume that it can send payments to the creditor's bank account. A back-end process updates the prenotes' status after the specified number of days has passed.

  If an ACH Return file is received from the creditor's bank, it will contain information that the prenote had errors that must be corrected before the creditor will accept payments from the debtor. The creditor must send a new, corrected prenote. If no return file is received after the defined number of days, then it can be assumed that the debtor's payments will be processed by the creditor's bank.

You can set up preapproved repetitive transfers and draw-down transfers in the Cash Management funds transfer pages, creating a template that stores the repetitive transfer agreement information. This information includes the unique identifier assigned by the bank that authorizes (or administrates) the transfer.

Note. As repetitive transfers and draw-down transfers are preapproved and preconfigured agreements, they cannot be initiated on an ad hoc basis.

Funds Transfer Business Process

To process funds transfers, you create the transfer (either ad hoc or using a template), select it for settlement, and if required, route it for settlement approval. After it is approved, the system forwards the transfer to either the Financial Gateway or obtained via Pay Cycle Manager depending on what you select on the Settle Through field on the External Accounts - Payment Methods page. Use the dispatch settlements functionality to transmit the transfer to the appropriate bank and bank account.

For repetitive and draw-down transfers, only the repetitive transfer code (for draw-down transfers, this is the third-party authorization code), amount, and date are transmitted to the ODFI.

Here is a general overview of the steps in the funds transfer process:

1. Create all of the templates required by your organization.

   Here are some possible combinations:

   • Bank account transfer.

   • Bank account transfer as a repetitive transfer.

   • Bank account transfer as a draw-down transfer.

   • Bank account transfer as a repetitive draw-down transfer.

   • EFT.

   • EFT as a repetitive transfer.

   • EFT as a draw-down transfer.

   • EFT as a repetitive draw-down transfer.

   • EFT as a prenotification.

2. Approve new and modified templates.

3. Create a bank account transfer or EFT request.

4. On the bank account transfer or EFT request, select the appropriate template to create the specific transfer needed and provide any necessary transfer information to complete the transfer instructions.

   You are not required to select a template if the transfer is considered a free-form transfer.

5. Select and approve transfers for settlement using the Settlement Manager.

6. Dispatch settlements to the appropriate banking institution for payment using Financial Gateway.

   Note. If the settlement is to be settled through Pay Cycle Manager, it will be picked up at a later time.

The system processes the approved funds transfers and generates the appropriate accounting entries. Accounting entries for EFT transfers may be generated only if an accounting template has been specified on the EFT transfer request. Accounting events for bank transfers are automatic and do not need an accounting template.

If Financial Gateway is used as the settle-through option, you can, with the proper setup, get periodic updates to the original transaction until the settlement is paid. For Wire transfers, the system can be configured to update the transaction with the Fed Wire ID generated by the bank for reference during inquiries.

Prenotification Process

To create a prenote:

1. Create a new EFT template on the Enter Transfer Templates - Origin page using a payment method and a payment layout that will support prenotes and select the Prenote check box.

   See Understanding the Layout Catalog.

2. Access the Prenotification Details page. (Optional)

   The prenote status is assigned a status of "New." You can set the number of calendar days that must transpire after the prenote is sent to Financial Gateway before the prenote status changes to Confirmed by the system if no ACH Return file is received.

3. Approve the template on the Approve Transfer Templates page.

   Upon approval, the system will prompt you to create a zero-dollar EFT Request, which serves as the transaction representing the prenote.

4. Click Yes.

   The EFT Request page is displayed with the Prenotification field selected. All of the information from the template is transferred to this EFT Request transaction with a zero-dollar amount.

5. Select the prenote for approval from the Select Settlements page.

6. Approve the prenote EFT Request from the Approve Settlements page.

7. Dispatch the prenote in Financial Gateway just as you would any other payment.

   This changes the status from "New" to "Pending." If no return is sent back from the bank within the number of business calendar days specified on the Prenotification Details page, the prenote status changes to "Confirmed." The status change is performed by a batch process that checks the number of days that have transpired since the creation of the prenote and compares it with the number of days specified on the Prenotification Details page (See step 2).

   If a return acknowledgment file is sent back from Financial Gateway, the prenote status changes to "Rejected" and the template will not be approved for use. If the errors in the prenote are correctable, a second prenote may be sent using this template. The status can be reset from "Error" to "New."

See Also

Working with Settlements

Prerequisites

To process funds transfers:

• Configure banks.

• Configure bank branches.

• Configure bank accounts and account payment methods.

At this time, you can optionally:

• Define settlement instructions.

• Define bank account transfer templates.

• Define EFT request template instructions and field level security for templates.

• Define settlement approval options.

See Also

Defining Account Settlement Information

Defining Settlement Instructions for Counterparty Deals

Setting Up the Bank Statement Import Process

Common Elements Used in This Chapter

Creating and Approving Funds Transfer Templates

To define transfer templates, use the Enter Transfer Templates component (TR_WIRE_TEMPLATES_GBL).

This section discusses how to:

1. Enter template origin information.

2. Specify template destination information.

3. Configure template EFT handling options.

4. Define template intermediary bank routings.

5. Enter template transfer addenda.

6. Add template internal notes.

7. Record template beneficiary address information.

8. Define template field security.

Understanding the Funds Transfer Template Component

Your organization may benefit from setting up transactions in advance with parties with which you conduct regular, specific transactions. For example, using template transactions can streamline the process of distributing quarterly payouts to clients or monthly or annual payments to vendors.

You set up the template, specifying whether it is for bank account transfers or EFTs. You can then further specify if the template is a repetitive transfer or draw-down transfer. Page values established at the template level for repetitive and draw-down transfers cannot be changed by a user at the transfer request level. In addition, you can specify security at the field level for the template.

Note. Pages and fields in the funds transfer template become available or unavailable for entry, depending on the selected transfer class.

To create a funds transfer template:

1. Select the Add a New Value tab on the Funds Transfer Templates search page.

2. Enter a SetID and Transfer Template ID, and specify a Transfer Class of Bank Transfer or EFT Transfer.

3. Complete the Origin, Destination, Beneficiary Address, and Template Field Security pages of the funds transfer template pages.

Pages Used to Create and Approve Funds Transfer Templates

Entering Template Origin Information

Access the Enter Transfer Templates - Origin page (Cash Management, Fees and Transfers, Enter Transfer Templates).

All available fields on this page are required. They contain relevant information about the account from which you are transferring funds. Available fields depend on the selected transfer class.

Specifying Prenotification Details

Access the Prenotification Details page (click Prenotification Details on the Enter Transfer Templates - Origin page).

See Understanding the Funds Transfer Process.

Specifying Template Destination Information

Access the Enter Transfer Templates - Destination page (Cash Management, Fees and Transfers, Enter Transfer Template, Destination).

For Bank Transfer templates, only the Bank Code and Bank Account fields are available for entry.

Complete all applicable and available fields for EFT Transfer classes.

See Also

Specifying Destination Information

International Bank Account Number (IBAN) Functionality

Defining Template Intermediary Bank Routings

Access the Routings page (click Routings on the Enter Transfer Templates - Destination page).

Values specified at the template level can not be overwritten at the request level.

Entering Template Transfer Addenda

Access the Enter Transfer Templates - Addenda page (click Addenda on the Enter Transfer Template - Destination page).

Values specified at the template level cannot be overwritten at the request level.

For funds transfers, direct debits, and treasury wires, this page consists of four 35-character lines. For automated clearinghouse transactions, this page is a free-form, 80-character field.

Adding Template Internal Notes

Access the Enter Transfer Templates - Detailed Description page (click View Description on the Enter Transfer Templates - Destination page).

Values specified at the template level can not be overwritten at the request level.

Information recorded in the Descr (description) field is not transmitted with the funds transfer.

Defining Template Field Security

Access the Enter Transfer Templates - Template Field Security page (Cash Management, Fees and Transfers, Enter Transfer Templates, Template Field Security).

Template Security Options

Managing Funds Transfer Template Approval

This section discusses how to approve funds transfer template changes.

Page Used to Manage Funds Transfer Template Approval

Approving Transfer Template Changes

Access the Approve Transfer Templates page (Cash Management, Fees and Transfers, Approve Transfer Templates).

Once transfer templates are created, or if existing templates are modified, you must approve templates prior to using them. This is true for funds transfers as well as prenotes. You can search for a specific template with a particular approval status and select to approve or deny items with your specified values.

To approve or deny transfer templates:

1. Enter your search criteria and click Search.

2. Click the template link in the Template ID column to view template information prior to approval or denial.

3. Select templates for approval or denial and click either Approve or Deny.

Beginning Transfer Funds Requests

This section discusses how to begin a transfer request.

You can create EFT, bank, and deals transfers from various locations in Cash Management. The Transfer Funds page acts as the first page of a multistep "wizard." Select options to create a particular funds transfer type, and the system then routes you to the correct pages to complete the transfer.

See Also

Creating EFT Requests

Creating Bank Account Transfers

Page Used to Begin a Transfer Funds Request

Beginning a Transfer Funds Request

Access the Transfer Funds page (Cash Management, Fees and Transfers, Transfer Funds).

Available fields on this page change depending on the transfer type that you select.

See Also

Creating Bank Account Transfers

Creating and Approving Funds Transfer Templates

Defining Template Field Security

Creating EFT Requests

This section discusses how to:

• Enter transfer origin information.

• Specify destination information.

• (Optional) Configure EFT handling options.

• (Optional) Define intermediary bank routings.

• (Optional) Enter transfer addenda.

• (Optional) Add internal notes.

• Record beneficiary address information.

You can use the pages in this section to create an EFT request, whether your request is for a regular EFT request, or an EFT request involving repetitive transfer or draw-down transfer information.

See Also

Creating Bank Account Transfers

Pages Used to Create an EFT Request

Entering Transfer Origin Information

Access the Transfer Funds - Origin page (Cash Management, Fees and Transfers, EFT Request, Origin).

Template ID	Select the template, if you are executing the EFT requests from a template. Note. Expired templates are not available for selection.
Prenotification	This field is display-only and will appear selected for ACH prenotes. See Understanding the Funds Transfer Process.
Fed Wire ID (federal wire ID)	For EFT requests associated with federal fund transfers, the Federal Reserve agency assigns a Federal Wire ID code after receiving the request. Enter the code in this field for your reference. This field is automatically populated if the bank returns acknowledgements containing the Fed Wire ID. This field is used only as reference in Cash Management; it is not necessary for the accounting process. Note. The Federal Wire ID code is the only reference number that the Federal Reserve recognizes when handling issues or questions about the transfer.
Fees	Click to create fees for this EFT request. See Creating Fee Entries for EFT Requests.
Payment Method	Select an available payment method (methods are determined by the values that you defined in the Bank Code and Bank Accountfields). Values are: Automated Clearing House, Direct Debit, Electronic Funds Transfer, or Wire Transfer. You cannot select a payment method for any type of repetitive transfer.
Business Date	Enter the business date on which the funds transfer is to occur. The date that you select carries over to the next business day, depending on: Holiday lists associated with the currency of the nation funding the transaction. Business day conventions established at your organization's Treasury Management implementation.
Acct Template (accounting template)	Select an accounting template if accounting is to be run for the transfer. Leave this field blank if the transfer is already accounted for in another PeopleSoft application (for example, Payables). Note. The Acct Template field is unavailable when the selected account in the Account # field is not enabled for cash clearing.

Transaction Information

See Also

Defining External Account Information

Specifying Destination Information

Access the Transfer Funds - Destination page (Cash Management, Fees and Transfers, EFT Request, Destination).

Get Settlement Instructions	Click to select settlement instructions and automatically populate fields. All fields are overwritten with the settlement instruction information, including fields on the Beneficiary Address, EFT Options, Routings, and Detailed Description pages. Also, if a field is blank in the settlement instruction, the corresponding field on this page is also blank.
Name 1 and Name 2	Enter the recipient's name and other significant identifying information (for example, a company name, a DBA, or joint payees).
Country	Select the destination country code, which also determines the selection of available values in the Bank ID Qual (bank ID qualifier) values. Then specify a qualifier that determines which edit algorithm the system should use to check the bank ID number sequence.
Bank ID	Enter the routing number of your recipient's financial institution.
Branch ID	Enter the recipient's branch number.
Acct Type (account type)	Select the destination account type: Bond Bus Acct (business account) Check Acct (checking account) Dem Dep (demand deposit) Lf Ins-Net (life insurance) Mutual (mutual fund) Ret It-DDA (returned item, demand deposit account) Ret It-Sav (returned item, savings account) S&B Acct (stocks and bonds account) Stock Time Dep (time deposit) Trust Fund
Account # (account number)	Enter the account number that you are funding with this transaction.
Check Digit	This field is conditional and dependent on the selected country.
	Click the View Description button to add internal notes about the funds transfer. These notes are not transmitted to the recipient.
DFI Qualifier (depository financial institution qualifier)	Select to identify the bank and enter the associated DFI ID (depository financial institution ID), if required. If you use intermediary routings, this bank represents the final bank into which funds are transferred. The DFI qualifier indicates what format—how many characters and numerics—are in the bank's DFI ID. Note that each type has a specific number of digits that you can enter. Values are: Transit Number: Exactly 9 numeric characters, plus check digit calculation. Swift ID: 8 or 11 characters; positions 5 and 6 must be a valid 2-character country code. CHIPS Participant ID (Clearinghouse Interbank Payments System participant ID): 3 or 4 numeric characters. CHIPS Universal ID (Clearinghouse Interbank Payments System universal ID): 6 numeric characters. Canadian Bank Branch/Institute: No validation. Mutually Defined: No validation.
IBAN (international bank account number)	Enter the IBAN. This field appears only if the IBAN Enterable field is selected on the IBAN Formats page.
IBAN Digit (international bank account number digit)(international bank account number digit)	Define the account's IBAN for transmittal with other transfer information. Enter the check digit and click View IBAN. If the DFI qualifier for the specified country is IBAN enabled, and the system successfully validates check digit, the IBAN for this account appears. This field and the View IBAN button appears only if the IBAN Enterable field is not selected on the IBAN Formats page.
BIC(bank identifier code)	Enter the BIC code for the selected bank. This code is based on the ISO standard (9362), which is the universal method used to identify the financial institutions that enable automated processing of payments. A BIC code is used to route cross-border and some domestic payments to a bank branch or payments center. SEPA requires the use of BIC and IBAN codes to uniquely identify the creditor's and debtor's banks and bank accounts in all Euro cross-border payments. It is imperative that the IBAN and BIC codes are correct to avoid repair fees that the bank charges due to processing errors, and to avoid delays in processing payments and collections due to the time-consuming correction of these errors. Once you enter a BIC code, the system validates the length and layout of the characters, and validates the BIC country code against the country code set up for the bank branch .

See Also

Understanding IBAN

Defining IBAN Formats

International Bank Account Number (IBAN) Functionality

Defining External Accounts Information

Creating Fee Entries for EFT Requests

This section discusses how to:

• Define fee codes for EFT requests.

• Create fee entries using EFT request fee codes.

Pages Used to Create Fee Entries for EFT Requests

Creating Bank Account Transfers

This section provides an overview of bank account transfers and discusses how to:

1. Process bank account transfers.

2. (Optional) View associated bank transfer ChartFields.

3. (Optional) View accounting events.

4. Process bank transfers using electronic settlements.

Understanding Bank Account Transfers

Transferring funds between bank accounts is a common requirement for cash managers. Typical tasks that require fund transfers are:

• Adjusting daily cash balances.

• Making a trade payment or receipt on behalf of a business unit.

• Funding the internal accounts of other business units.

Note. Only corporate treasury-designated banks can initiate fund transfers. However, this rule does not apply when the transfer is between two bank accounts that belong to the same business unit.

The system schedules accounting events and updates bank balances. Bank transfer transactions are also available to the settlements module for all settlement-related processes and eventual payment. You can create templates for transfers that occur frequently; you can then recall the template and enter the amount and the date.

These transfer types are supported by the system:

• Internal bank transfers: from one internal account to another internal account.

• External bank transfers: from one external account to another external account.

See Also

Defining Internal Account Information

Prerequisites

You must set up internal bank accounts for internal transfers. for external transfers, external accounts must be created.

To set up internal bank accounts:

1. Define a bank with the Type set to Internal on the Bank Information page.

2. Create an internal bank account between two internal bank types.

See Also

Defining Internal Account Information

Pages Used to Create Bank Account Transfers

Processing Bank Account Transfers

Access the Bank Account Transfer page (Cash Management, Fees and Transfers, Bank Account Transfer).

To create internal bank account transfers:

1. Select the Add a New Value tab on the Bank Account Transfer search page.

2. Enter values in the Business Unit and Transfer ID fields, and specify a value of Internal Transfer in the Transfer Type field.

3. Click Add.

4. Enter a description.

5. Create internal bank account transfers from a template or on an ad hoc basis:

   • Click Use Template to select a defined template on which to base a transfer. This displays a list of templates from which you can select according to the business unit transfer ID and description. The system populates all of the fields except Tran Date (transaction date) and Amount. To create the transfer, complete those fields.

     Note. Expired templates are not available for selection.

   • Create an ad hoc internal bank account transfer by completing fields only in the Transfer From Account and Transfer To Account regions.

     If you anticipate that the ad hoc transfer will recur frequently, select the Can be used as Template check box to save it as a template.

   • Click the Instructions button to review the settlement instructions. The settlement instructions define how the payment or transfer is made—the system uses the deposit instructions from the bank account that is receiving funds (the Transfer To Account bank).

6. Save the transfer.

If you are creating external bank account transfers, you can specify a transfer template that may also include drawdown wire or repetitive wire information.

To create external bank account transfers:

1. Select the Add a New Value tab on the Bank Account Transfer search page.

2. Enter values in the Business Unitand Transfer ID fields, and specify a value of External Transfer in the Transfer Type field.

3. Click Add.

4. Enter a description.

5. Create external bank account transfers from a template or on an ad hoc basis:

   • Select a transfer template ID to automatically populate the external bank account transfer with information. If you create an external bank account transfer from a template, you can also click the Chartfields link to edit the bank transfer ChartFields.

   • Leave the Transfer Template ID field blank to create an ad hoc bank account transfer. Complete the remaining fields on the page. If you create an ad hoc external bank account transfer, you cannot modify the bank transfer ChartFields.

   • Click the Instructions button to review the settlement instructions. The settlement instructions define how the payment or transfer is made—the system uses the deposit instructions from the bank account that is receiving funds (the Transfer To Account bank).

6. Save the transfer.

Transfer From Account

Describe the bank account that is serving as the fund source.

• For an external bank, select the bank and the bank account.

• For an internal bank, select the bank, and then specify the account customer and associated bank account. (The customer represents the business unit that is serving as the fund source.) Enter the monetary amount to transfer.

Transfer to Account

Indicate the bank account or internal account that is receiving the funds. Select a bank that is an appropriate match for the transfer from account only.

• If the transfer from account bank is an external bank, then the transfer to account bank must also be external. For an external bank, select the bank and bank account.

• For an internal bank, select the bank and then specify the customer and the associated bank account. (The customer represents the business unit that is receiving funds.)

For example, suppose that you want to move business unit UBUO3's balance from its account with TBU02 to TBU01's account with TBU02. This table lists the set up:

Note. External transfers must first be selected and approved before being processed through the Financial Gateway or Pay Cycle Manager.

For internal transfers, some restrictions are enforced:

• The customer specified as the Transfer From Account cannot be the same as the bank specified as the Transfer To Account for the same transaction.

• Similarly, the bank specified as the Transfer From Account cannot be the same as the customer specified as the Transfer To Account for the same transaction.

After you save the transfer, the system updates cash flows and generates an accounting event to create journal entries for this transaction.

Note. When internal accounts are established between two business units, you can specify a default internal account. If more than one account exists between two business units with the same currency, the default account is the one that is processed in bank transfer.

See Also

Reviewing Accounting Information

Understanding Electronic Banking

Viewing Accounting Events

Access the Accounting Events page (Cash Management, Treasury Accounting, Accounting Events).

Enter Bank Transfers in the Source Code field to view the scheduled accounting event.

See Reviewing Accounting Information.

Reviewing Repetitive Transfers

This section discusses how to review repetitive transfers.

Page Used to Review Repetitive Transfers

Reviewing Repetitive Transfers

Access the Review Repetitive Transfers page (Cash Management, Fees and Transfers, Review Repetitive Templates).

To maintain your repetitive transfers:

1. Enter your search criteria, and click the Search button.

2. From the returned results, click a Template ID to access the specific transfer template's information.

3. If you edit any information on the transfer template:

   • Click OK to save your changes and return to the Review Repetitive Transfers page.

   • Click Cancel to discard your changes without saving, and return to the Review Repetitive Transfers page.

   • Click Apply to save your changes without returning to the Review Repetitive Transfers page.