When you send your ACH payments, what level of detail do you receive back in order to perform bank statement clearing? Some banks are able to provide line item details back to clear individual payment documents, while other banks only provide back a single lump sum for clearing.
In this post, I will show automated ACH clearing on electronic bank statements using DME reference numbers. This will allow clearing of the individual line items by a batch total provided by the bank. There are a few prerequisites for this solution.
1. DME reference information must be sent to the bank as part of the payment file. If you are using Payment medium workbench layouts (examples- ACH or an ISO20022 XML) you will see the reference number on F110. Here is an example:
2. The bank should provide the information back as part of the reference field on the bank statement. Here is an example:
Note: It is important that the reference information shows in the appropriate field in order for the bank statement clearing to work properly.
Once the prerequisites have been met, there are a couple set-up steps required as part of your electronic bank statement configuration:
- Posting rule to perform clearing
- External transaction code assignment to use DME clearing algorithm
Posting rule to perform clearing
When setting up the electronic bank statement configuration, you will need to create a posting rule that will allow clearing from the outgoing payments account. This will need to be posting type 4, as it will clear the outstanding items from the clearing account posted to as part of the F110 payment transaction.
External transaction code assignment to use DME clearing algorithm
Finally, we need to assign the External transaction code to the DME clearing algorithm (019). Our example bank statement is BAI2 type. We receive our batch total on BAI code 469. Assigning our posting rule and Interpretation algorithm 019 will complete our set-up.
This is what you can expect to see on the posting log when uploading the bank statement file as part of the FF.5 transaction. The DME reference number provided is showing as part of the posting log along with the document number that performed the clearing.
Displaying the clearing document, we can see the three payments from our original batch.