ACH-verify bank information

MinalPatelMinalPatel Posts: 19
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edited April 21 in Finance & Operations

Hello,

I am curious to find out how often other foundations verify bank information if grantees are set up to receive grant payment via ACH and we only grant them once or twice a year. Who verifies the account and routing number (Grants coordinators or Finance dep.) and how (email or call)?

Thank you,

Tagged:
KaraAdamsMicheleTMcKinney

Answers

  • MeghanWarrickMeghanWarrick Posts: 23
    Groundbreaker Second Compass Anniversary Certified Public Accountant Photogenic
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    Hi Minal. We are not yet set up for ACH so I don't have an answer to your question. I am hoping others will respond to your question and hopefully provide ways they've automated this process so that the grantees are entering and updating the information directly to the bank or other ACH processor. Is that an option or am I dreaming?? Anyone have any luck taking your foundation out of the middle of that process?

    KaraAdams
  • JoyceBrasherJoyceBrasher Posts: 24
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    Our foundation is currently looking into ways to make grant payments through ACH and I've been doing some research. Right now we require a grant agreement to be signed with every grant so it should be easy to incorporate some type of direct deposit form to be completed every time as well. We have no plans to store their bank information in our system. We can use the information provided on the direct deposit form, whether that is passed directly to our bank or we manage it temporarily in house, then destroy the form.

    We are attempting to find a way to stay out of the middle of the process to avoid errors and ensure security of their bank information.

    I will keep you posted on our progress as it develops.

    Joyce

    Then Daniel Foundation of Alabama

    KaraAdams
  • We opted to use bill.com for our grant payments. This relieves us entirely of being responsible for the appropriate handling of sensitive account information - bill.com acts as the intermediary. Grantees can sign up for a free bill.com account if it is used only for receiving payments. We have a follow up form in GLM that we have each grantee fill out that includes their bill.com PNI (payment network id). Verification is achieved when the grantee organization matches the name in bill.com tied to the PNI. We are so glad we did it! And it interfaces nicely with QuickBooks Online, which is our accounting system; both products are owned by Intuit.

    JoyceBrasherTrinaFrandsenmattgreer
  • TrinaFrandsenTrinaFrandsen Posts: 5

    @DeborahMueller Does Foundant have an integration system with Bill.com? Or do you have to use it entirely outside of the system? Anyone know the answer?

    KaraAdams
  • DeborahMuellerDeborahMueller Posts: 9
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    To my knowledge, no, Foundant doesn't integrate with bill.com, nor QuickBooks (which is where we originate the transactions that then feed into bill.com). It would be awesome if it did. If it does and I'm simply unaware, I sure hope someone lets me know!

    KaraAdams
  • TrinaFrandsenTrinaFrandsen Posts: 5

    Thank you, Deborah! Foundant told me they do not have this ability.

  • KaraAdamsKaraAdams Posts: 524
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    @TrinaFrandsen & @DeborahMueller - Don't quote me, but I believe this is already an Idea Lab suggestion. Feel free to vote it up there, or add your own specific suggestion. In the meantime, there are a few other discussions here in Compass that might be helpful.

    Kara

    Community Manager

    TrinaFrandsen
  • DeborahMuellerDeborahMueller Posts: 9
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    @TrinaFrandsen I did just learn that Foundant supports APIs for those with an Advanced license. I don't know quite how these work (yet!), but I believe the capability could be used to export installments, including bill.com PNIs, to Quickbooks, then import payments back into GLM.

    Thank you @KaraAdams - I'll have to check out those links!

    KaraAdamsTrinaFrandsen
  • CherylLindstromCherylLindstrom Posts: 8
    Partner U.S.A. Second Compass Anniversary Grant Lifecycle Manager (GLM)
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    Hello Minal,

    Our Foundation moved to electronic Grant Agreements and ACH authorizations last year. After each application is approved the applicant is assigned a follow up, requesting that they submit both forms electronically in order for funds to be disbursed. This way, should they change Banks or designated accounts, they can provide that information directly to us on the form for each grant awarded. This information remains attached to their application. I have attached a copy of these forms here. Let me know if you have any questions.


    KaraAdamsDeannaWardJoyceBrasherSusanHaley
  • DeborahMuellerDeborahMueller Posts: 9
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    @CherylLindstrom when we decided to stop mailing checks to grantees, we looked into ACH and decided against it, as that information can be misused if accessed by malicious actors. I don't believe Foundant's data security is designed to the level required for financial information - you might want to discuss it with your client success manager. As we understand it, if there was a breach in Foundant's data, it could have bad consequences for grantees whose info is stored there, and the legal responsibility could fall to your organization. The beauty of bill.com is that the responsibility for the security of the banking information lies with bill.com, whose system (and business model) is designed around financial data security.

  • CherylLindstromCherylLindstrom Posts: 8
    Partner U.S.A. Second Compass Anniversary Grant Lifecycle Manager (GLM)
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    edited April 15

    @DeborahMueller Of course our legal and financial advisor team reviewed and approved the process. I work for a Bank, where security is our highest priority.

    DeborahMueller
  • WendyVendelWendyVendel Posts: 11
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    Hello. We switched to ACH two years ago. Note, we have two cycles per year, approx 200 payments each cycle that we process all at the same time.

    We ask for the authorized banking contact email address on our grant acceptance (agreement) form within GLM. I then run a report on that field once I receive all the agreements back and export as .csv. We utilize DocuSign to obtain banking details (routing, account numbers etc.). I created templates with DocuSign and utilize the batch functioality to send to everyone in a few clicks (each org gets their own envelope).They are encyrpted and easily purged after the process is complete. Once they are all returned, I utilize DocuSigns export function that takes all the banking information and places it in another .csv file on our encrypted cloud server. From there, I import it into our online banking ACH templates in bulk. It sounds like a lot of steps but is rather easy and secure. We are considering bill.com. Two years ago, because there weren't a lot of foundations using it combined with not having customer service readily avaible, I went this route. But I am now reconsidering given the current track record. Happy to provide more details if people are interested. Good luck!

    KaraAdamsJoyceBrasherShannonFitzgeraldNancyLaFlamme
  • MinalPatelMinalPatel Posts: 19
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    Thanks @CherylLindstrom we don't have grant agreement for each grant that goes out each week and that's why I am asking if there is another way to verify account numbers before releasing the grant payment to grantees who receive grant from us only very few times a year. Some grantees who receive grants frequently form us do get back to us as soon as they have new banking information so we can update our system.

    KaraAdams
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