Positive pay files from accounts payable, automated
Positive pay protects a city's bank account from altered and counterfeit checks, but only if the issued-check file reaches the bank every day. How to automate it from the ERP, and what to check.
Check fraud remains a real risk for public agencies. Positive pay is the standard defense: the city tells its bank which checks it wrote, and the bank only clears checks that match. Anything else is flagged for review before money leaves the account.
The protection depends on one routine task: sending the bank an accurate file of issued checks, every day, on time. If the file is late or wrong, legitimate checks are flagged and fraudulent ones may slip through.
How positive pay works
- Accounts payable prints checks in the ERP.
- The city sends the bank an issued-check file: check numbers, amounts, dates and often payee names.
- When a check is presented, the bank compares it with the file.
- Mismatches go to an exceptions list that city staff review, deciding to pay or return each one.
Payee positive pay adds the payee name to the comparison, which catches checks where the name was altered.
What goes in the file
Banks set the layout. Most files include:
| Field | Notes |
|---|---|
| Account number | The disbursement account the checks are drawn on |
| Check number | Must match the printed check exactly |
| Amount | Usually without symbols, sometimes in cents |
| Issue date | In the bank's date format |
| Payee name | Required for payee positive pay |
| Void indicator | For checks voided after issue |
Some banks accept CSV. Many still use fixed-width files, where each field sits in set character positions. Get the bank's layout document and a sample file.
The automated flow
- On a schedule, weekday afternoons. After the day's check run, before the bank's cut-off.
- Read issued checks from the ERP since the last run.
- Keep checks only. Filter out electronic payments, which don't belong in the file.
- Map to the bank's layout. Account, check number, amount, date, payee.
- Write the file to the bank's SFTP folder.
Things to get right
Cut-off times
Banks usually need the file before checks can be presented. Schedule the flow after your last check run of the day and before the bank's deadline, with enough room for a retry.
Voids
When a check is voided after the file was sent, the bank needs to know. Decide whether voids go in the next daily file or a separate one, as your bank prefers.
Payee names
Names in the file should match what is printed on the check. If the ERP shortens or formats names differently on the check, use the same rule in the file.
Duplicates and gaps
Each check should appear once. Reading only checks issued since the last successful run avoids repeats, and a missed run catches up on the next one.
Check the totals every day
A short control report helps both finance and auditors:
- Number of checks and total amount in the file.
- The same figures from the ERP's check register for the day.
- Any difference, flagged by email.
If the totals agree and the file was delivered, a short confirmation email is often enough. If anything is off, the right person hears about it the same afternoon.
Test with the bank
Banks usually offer a test process for new positive pay files. Use it:
- Send sample files and get the bank's confirmation that they parse correctly.
- Test a void, and a check with a long payee name.
- Agree who at the city receives the bank's exception notices.
Keep people on the exceptions
Automation sends the file. People still review exceptions the bank reports, decide whether to pay or return each item, and follow up on anything suspicious. Make sure that review has a named owner and a backup.
In SentraBridge
A SentraBridge template reads checks issued in Munis and writes the bank's positive pay file to its SFTP outbox each weekday afternoon. SentraBridge writes CSV and fixed-width layouts, pins each SFTP server's host key, and keeps no copy of the payment records. The Munis connector is built from Tyler's public descriptions and confirmed with your documentation during setup. See payment and finance files.