Overview

In Brazil, Banks play an important role in the company’s collections process. The payment collection process involves a series of transactions between the supplier, customer, and the bank.

Such processes are automated using electronic file transfers that transfer information from companies to banks, and the return from banks to companies. The data flows are as follows:

• Electronic file transfer from Company to Bank

  Companies send information about required collections that are based on invoice payment terms to their collection bank (bank collections remittance).

  Companies send information about updates, discounts, or protests and corrections in relation to files sent for collection (bank collection updates remittance).

• Electronic file transfer from Bank to Company

  After the collection, the bank collects a payment from the customer and transfers information to the company, so receipts can be created and applied against the customer’s balance. This process is called Bank Collection Returns.

  Note: The electronic files mentioned previously must follow the standardized text file format defined by the Brazilian Bank Association (FEBRABAN). The format is called Bank Automation National Center (CNAB) but the file layout might vary slightly from bank to bank.