I have helped several clients implement Positive Pay reporting on their system. It is normally a situation of shooting in the dark, guess-work and trial-and-error that is, without exception, unnecessary. These problems are caused by a severe lack of communication skills from most banks.
Positive Pay, for the uninitiated, works like this: Your business prints checks (or uses ACH direct deposit or funds transfers) to pay bills. The Accounts Payable program generates a small text file that is uploaded to the bank with a list of valid checks that are to be honored. If a check is presented to be paid and it isn’t on the list the bank refuses to honor it and sends it back.
This is all to prevent fraud and it works. I have clients who, before implementing PP, had fraud attempts that were usually in the tens of thousands of dollars. Sometimes they were detected and stopped, but not always. Positive Pay stops it cold.
It’s a great plan, but there is no standard file format. It’s all up to the bank, and sometimes, most times, they provide poor documentation describing what they want that file to look like. Creating a new format for a new bank rarely succeeds the first time, and usually not until several tries have failed.
The IT department at each bank decides everything. The normal requests are for the following:
Bank account number
The options demanded for the date format have grown to the point that Passport now offers nine different ways of showing the date. Nine. No kidding, and that doesn’t even include the separator options. There are five different options there. Did I mention leading zeros for the day or month? Because some banks demand them, while some will reject the file if the date has leading zeros.
This is a chart showing the different ways the Passport Software A/P program can present the date of June 5, 2021. I will not vouch for the absolute accuracy of this chart, it was difficult to complete. There are 31 options that I count, in case you're interested.
|JUN 05 21|
|JUNE 05, 2021|
|06052021||06-05-2021||06.05.2021||06 05 2021||06/05/2021|
|6052021||6-05-2021||6-05-2021||6 05 2021||6/05/2021|
|05062021||05-06-2021||05.06.2021||05 06 2021||05/06/2021|
|5062021||5-6-2021||5.6.2021||5 6 2021||5/6/2021|
|20210605||2021-06-05||2021.06.05||2021 06 05||2021/06/05|
This doesn't even touch the options of how dollar amounts are requested. Should the decimal be inserted in the number, or implied? How long is the number itself? Should it be padded on the left with zeros? For a five hundred dollar check, do they want to see this? 000000050000 or maybe this? 000000500.00 or this? 50000
All three are potentially acceptable ways of presenting exactly the same information.
The bank decides. There is no standardization and as far as I know there's no effort to standardize. It's a huge waste of time and effort that is repeated on a daily basis across the country. There is no reason for this confusion except the shortsightedness and complacency of the banking industry. They should have known better.