Creating NACHA payments from Oracle

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The National Automated Clearing House Association (NACHA) file format is one of the most common electronic payment file types. It is used for executing domestic ACH payments through the Automated Clearing House Network.

Overview

A NACHA file is a payment instruction file sent or uploaded to a bank portal to execute a mass payment batch. This file is formatted according to NACHA specifications and varies by bank. Many banks that support the NACHA file, including Wells Fargo®, Bank of America®, J.P. Morgan Chase®, T.D. Bank N.A.®, and so on.

Oracle® R12 provides the following standard formats:

US NACHA PPD: According to Treasury Software®: “Prearranged Payment and Deposit - Used to pay or collect from personal (consumer) accounts. Examples include direct deposit of payroll to employees, payments to individuals, and collections from personal (consumer) clients.”

US NACHA CCD: The term CCD, in banking, refers to cash concentration and disbursement for corporate credits and debits.

Now, let’s set up a format in Oracle and generate a sample NACHA file.

Set up format

Use the following steps to set up the format:

1. XML templates

Create an XML publisher template in this step by using the seeded US NACHA CCD Format provided by Oracle.

Navigate to XML Publisher Responsibility > Templates > Create template.

Use the following settings:

• Data Definition: Oracle Payments Funds Disbursement Payment Instruction Extract 1.0
• Type: eText – Outbound
• File: IBYDE_S103_en.rtf This is a standard template by Oracle. You can take this as a base and modify it as per your bank or business requirements.

2. Payment formats

Navigate to Payables Manager: Setup > Payments > Payments Administrator > Formats > Formats.

Use the following settings:

• Data Extract: Oracle Payments Funds Disbursement Payment
• Instruction Extract: Version 1.0
• XML Publisher Template: US NACHA CCD Format

3. Payment documents

Assume that you have already created your Banks, Bank Branches, and Bank Account. In this step, you attach the Payment Format US NACHA CCD Format to the Payment Document.

Navigate to Payables Manager > Setup > Payment > Bank Accounts and click Manage Payment Documents and Create.

Use the following settings:

• Name: XXXX NACHA
• Paper Stock Type: Blank Stock
• Format: US NACHA CCD Format
• First Available Document Number: 100001
• Last Available Document Number: 999999

Click Apply.

4. Payment process profile setup

Navigate to Payables Manager > Setup > Payment > Payment Administrator > Payment Process Profiles and click Create.

Use the following settings:

• Code: XXXX_PPP
• Processing Type: Electronic
• Name: XXXX PPP
• Payment Instruction Format: US NACHA CCD Format

Click Apply.

Generate the NACHA file

Use the following steps to generate the NACHA file:

1. Enter invoice for a supplier

Navigate to Payables Manager > Invoices > Entry > Invoices.

Ensure that the supplier has the payment method as Electronic, and the invoice is in Validated Status.

2. Pay the invoice

Navigate to Payables Manager > Payments > Entry > Payments Manager.

Perform the following steps:

1. Enter the PPR name.

2. Enter the Payee name if you want to limit the invoice selections in this PPR.

3. Select Electronic payment method.

4. Enter your bank account, payment document, and PPP. Then click Submit.

5. Refresh the status and wait till the PPR status is Confirmed.

6. Navigate to View > Requests > Find.

7. Find Format Payment Instructions with text output and click View output.

The output from Format Payment Instructions is the NACHA file generated from the preceding invoice and its payment. You can save this to your local desktop and upload it to the bank for further processing.

Conclusion

Generating and uploading a NACHA file on the bank’s server is becoming one of the most demanding features across industries. Across all ERPs, Oracle provides one of the best processes for generating the NACHA file. After a few setup steps, you are ready to go with your ACH file. Different banks have different formats of NACHA, so Oracle also provides the option of customizing the standard RTF file to match the individual bank specification.

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