Positive Pay is an automated fraud detection tool offered by the Cash Management Department of most banks. In its simplest form, it is a service that matches check information of each check presented for payment against a list of checks previously authorized and issued by the company.
Some banks match only Account Number, Check Number and Check Amount.
Some other banks added the Payee Name to the data to match, this service is called "Payee Positive Pay"
How does Positive Pay work?
Positive Pay requires the company to send (transmit) a file of issued checks to the bank each day checks are written. When those issued checks are presented for payment at the bank, they are compared electronically against the list of transmitted checks. The check-issue file sent to the bank contains the check number, account number, issue date, and dollar amount. Sometimes the payee name is included, but is not part of the matching service.
When a check is presented that does not have a "match" in the file, it becomes an "exception item". The bank sends a fax or an image of the exception item to the client. The client reviews the image and instructs the bank to pay or return the check.
ChequeSeal Positive Pay Software
What does ChequeSeal software do?
ChequeSeal software seamlessly interfaces with your accounting software and automatically generates the Positive Pay issue file according the bank's specification.
Each bank has its own unique file format in which data should be submitted - one large national bank has over 10 formats! In addition, banks often require headers and footers containing summations, record counts and hash totals.
ChequeSeal software can handle multiple banks format and it can be set to transmit the issue files automatically without user's intervention.
Need more information? Give us a call: 818-563-9335.