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Catching up on ACH functionality in Oracle Apps

Hello again!

Job interviews are an incredible source of spotting opportunities for improvement in your technical, functional and interpersonal skills.

This time I did not do good. They asked me: “Have you worked with ACH transactions?”. And my answer was: “No”. When the interview was over, I started researching on the subject. Following is a brief of my findings.

ACH states forAutomatic Clearing House. is an electronic network for financial transactions in the United States. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit payroll and vendor payments. ACH direct debit transfers include consumer payments on insurance premiums, mortgage loans, and other kinds of bills. Debit transfers also include new applications such as the Point-Of-Purchase (POP)  check conversion pilot program sponsored by NACHA-The Electronic Payments Association. Both the government and the commercial sectors use ACH payments. Businesses are also increasingly using ACH to collect from customers online, rather than accepting credit or debit cards.

In 2002, this network processed an estimated 8.05 billion ACH transactions with a total value of $21.7 trillion. Note that credit card payments are handled by different networks. The main difference between ACH transactions and credit card transactions is  credit cards guarantee the funds for the payment, while in ACH the funds are not guaranteed. The ACH transaction may reject for several reasons with the most common being NSF (non sufficient funds) or a closed account.

How to set up this method of payment/collection in Oracle Applications?

Payables:  R12 please review Oracle Payment’s Implementation Guide, Chapter 10: Using Oracle Payments with External Payment Systems for Funds Capture.

Receivables:  R12 please review Whitepaper: Automatic Receipts –  A complete Guide for Oracle Receivables Users (ID 745996.1) in Metalink and the Receivables documentation as well.

This post is only a brief introduction on the subject. All contributions are welcome, feel free to comment.

Have  a nice weekend and TGI’s Friday!



Filed under: Functional Tips, Uncategorized

3 Responses

  1. fberrozpe says:

    More about ACH in Oracle Apps. ACH in Oracle Apps can be implemented in a variety of ways. An example of this would be through interfacing with a third party vendor like for example SunGard. Probably the cleanest way of implementing ACH payments is through EDI. What is EDI? EDI is the electronic exchange of business information using a standardized format. In other words, EDI is a process which allows one company to send information to another company electronically rather than with paper.
    Going back to Oracle technology, you can use Oracle’s e-Commerce Gateway (this is the Oracle EDI Gateway evolution). You would use the Outbound Payment Order / Remittance Advice (820 / PAYORD, REMADV). In the EDI Payment Method (BPR01 / DE591) you can define ACH: Automatic Clearing House.
    Extensive documentation on this can be found in R12’s Oracle® e-Commerce Gateway Implementation Manual, Part No. B31058-01 under “Outbound Payment Order/Remittance Advice (PYO/820/PAYORD-PAYEXT-REMADV)”.
    Have a nice weekend!

  2. Angel Guzman says:

    Muy buen articulo. Saludos desde Argentina!

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