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Save time, reduce costs and expedite reconciliation by speaking the same language

March 2011

In our February FedFocus issue, we introduced you to new funds transfer industry standards in “Remittance best practices help facilitate end-to-end processing.” We learned that if every player in the funds transfer payment chain follows a set of agreed-upon best practices, it will help to ensure that extended remittance data can flow from end to end, facilitating straight-through processing (STP). We’re continuing the best practices topic with a series of FedFocus articles that break down the best practices for every player in the funds transfer payment flow, starting with the originator of the funds transfer (see the Fedwire Funds Transfer Flow diagram below).

Fedwire Funds Transfer Flow

 

High-level concepts from the Wire Transfer Extended Remittance Information (ERI) - Domestic Best Practices document for the originator are highlighted below.  For more details on each best practice, refer to the Best Practices Document.

  1. Talk with your financial institution to understand how it supports extended remittance information before sending your payment order.
  2. Evaluate your software tools to see if they support extended remittance information.
  3. Evaluate your accounts payable process to determine if any changes are needed now that your remittance information will accompany the wire transfer payment. For example, you likely sent remittance information through the mail or via e-mail, so you may need to modify your accounts payable process.
  4. Talk with the beneficiary to ensure that it can receive extended remittance information from its bank.

Save time, reduce costs, expedite reconciliation

Implementing each of the best practices above will help to save time, reduce expenses and expedite reconciliation. Including the remittance information along with the payment will eliminate the printing and mailing of remittance information and reduce inquiries for missing remittance information. If you and your beneficiary modify your accounts payable and receivable processes to automate the sending and receiving of payment and remittance information, you will help facilitate STP.

For more information

We will feature best practices for the other parties in the funds transfer process in future FedFocus issues. In the meantime, Fedwire Funds Service customers can review background information and guidance on preparing for the new expanded remittance information format in our online resource center. Testing and implementation details will also be provided by the Federal Reserve Banks in coming months. Sign up to stay informed about upcoming developments related to the new business remittance information message format. If you have additional questions about our Fedwire Service Offerings, contact your account executive.

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