Payment Options Presented by: The Office of Cash Management To: UIUC Business Managers Group October 2, 2007
Effective University Payments – Why You Should Care Cost Speed/Urgency Security – Recall/Repair Payee Requirements
Benefits of Payment Options – Which is Best? Check Purchasing Card (P-Card) Wire Transfer Automated Clearing House (ACH) Foreign Draft
Check Small dollar amount within the U.S. Unable to obtain banking instructions from vendor Vendor may not accept credit cards Costly internal processing Susceptible to check fraud
Benefits of Payment Options – Which is Best? Check Purchasing Card (P-Card) Wire Transfer Automated Clearing House (ACH) Foreign Draft
Purchasing Card (P-Card) Simple, quick & convenient Good alternative to checks Reduces costly internal processing Susceptible to credit card fraud
Benefits of Payment Options – Which is Best? Check Purchasing Card (P-Card) Wire Transfer Automated Clearing House (ACH) Foreign Draft
Wire Transfer Same day transaction (USD) Two days for foreign currencies Preferred method for large dollar amounts Greater than $500,000 Expensive transaction Excellent Security Minimizes payment fraud Difficult to repair / recall
Benefits of Payment Options – Which is Best? Check Purchasing Card (P-Card) Wire Transfer Automated Clearing House (ACH) Foreign Draft
Automated Clearing House (ACH) Cost effective Increased efficiency Improved cash flows Amount known in advance No float / settlement date is specified Fraud resistant Quick notification of payment problems
Benefits of Payment Options – Which is Best? Check Purchasing Card (P-Card) Wire Transfer Automated Clearing House (ACH) Foreign Draft
Foreign Draft “Check” mailed to a foreign country Preferred payment type when: Vendor requests draft payment format, OR Vendor can not receive a wire transfer, OR Amount is too low to efficiently use a wire May be “last resort” payment Difficult to repair / recall Costly to process Susceptible to delay / loss
Important Information Needed From Vendors Account number of payee IBAN if sending to Europe CLABE if sending to Mexico Payee name or bank account title Payee bank name and address
Important Information Needed From Vendors Specify amount of payment & currency ABA (a.k.a. “Routing Number”) Foreign Banks: SWIFT/BIC Currency (USD or foreign) Exchange rate based off the University’s bank when the wire is executed
How to Initiate an Electronic Payment Wire forms can be found at OBFS Forms – Cash Handling www.obfs.uillinois.edu/obfshome.cfm Fill out all information and attach supporting document Retrieve appropriate signatures and phone numbers Send to accounts payable for processing
Additional Resources Foreign Wires Prior to initiating a wire, you can validate the IBAN and SWIFT at: IBAN: www.apacs.org.uk/payments_industry/ibans_4.html SWIFT www.swift.com/biconline
Additional Resources Domestic Wires Prior to initiating a wire, you can validate the ABA at: ABA: www.fedwiredirectory.frb.org/search.cfm
Additional Resources When expecting an incoming wire, contact: Cash Management (cashmgmt@uillinois.edu) or University Accounting (uas@uillinois.edu) What you will need to provide: Vendor name Approximate amount Date of expected transfer CFOAPAL for credit posting to Banner
Summary Tables What’s most important for your payment?
Please e-mail the cash management office at: Questions? Please e-mail the cash management office at: cashmgmt@uillinois.edu Or call us at: 217-333-2400