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Foreign Payments

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... weeks depending on the location of the vendor. Can they ... Bank of America, Standard Chartered Bank, JP Morgan, etc. 2. What is the City/State of this bank? ... – PowerPoint PPT presentation

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Title: Foreign Payments


1
Foreign Payments
  • By Heather Flanagan
  • NOAA Finance Office, 20020 Century Blvd.,
    Germantown, MD 20874
  • Phone 301-444-2786, Fax 301-427-2025

2
Payment Types
  • US Dollar
  • Check
  • Treasury
  • Name Only
  • EFT Electronic Funds Transfer
  • Foreign currency
  • Check
  • EFT Electronic Funds Transfer

3
US Currency
4
US Currency Options
  • Treasury Check Treasury will send the check to
    the vendors address in CAMS which is obtained
    from the Vendor Profile form.
  • Name Only Check - Treasury will send the check to
    Finance HQTR for Finance to send to either the
    Line Office or directly to the vendor via FedEx.
  • US Dollar Wires We pay the vendor via bank
    wires to their bank.
  • Can be either a wire to a foreign bank or US Bank.

5
Treasury Checks
6
Why should I send a Treasury Check?
  • No rush for payment to reach vendor
  • The vendor does not have a bank account
  • Every ASC can process this payment type

7
Why Not Treasury Checks?
  • Tracking problems - There is NO WAY TO TRACK
    once the check has left the Treasury until the
    vendor cashes it.
  • Will it arrive safely? Many countrys mail
    systems are inept and unreliable.
  • It takes too long. Treasury will send the check
    to the foreign country via regular mail. This
    may take weeks depending on the location of the
    vendor.
  • Can they cash a US check? It is difficult for
    some foreign vendors to cash a US check in
    their country.
  • Human Error Checks get lost.
  • Unreliable - Checks are one of the most common
    forms of payments that are returned and/or never
    cashed.

8
What does Finance need to process Treasury Checks?
  • Vendor Profile Form - Accurate name/address of
    vendor who will cash the check.

9
At a glanceTreasury Checks
  • PROS
  • No rush for payment to reach vendor
  • No bank account for vendor
  • Every ASC can process this payment
  • CONS
  • Tracking Problems
  • Will it arrive safely?
  • It takes too long.
  • Can they cash it?
  • Human error
  • Unreliable

10
Name Only Checks
11
Why should I send a Name Only Check?
  • Hard Copy - The check is received by Finance
    directly from the US Treasury, allowing us a copy
    of the check.
  • Track shipping - FedEx will track the shipment of
    the check and is faster than regular mail.

12
Why Not Name Only Checks?
  • Expense Did you know it costs approx. 83.00
    to process a Name Only check?
  • (not to mention all the FedEx fees which can be
    greater than 50)
  • Human Error - Checks get lost.
  • Can they cash a US check? It is difficult for
    some foreign vendors to cash a US check.
  • Unreliable - Checks are one of the most common
    forms of payments that are returned and/or never
    cashed.

13
What does Finance need to process Name Only
Checks?
  • Vendor Profile Form - Accurate name/address of
    vendor who will cash the check.
  • Mailing information Where would you like
    Finance to send the check?
  • To the Line Office
  • To the Vendor

14
At a glanceName Only Checks
  • PROS
  • Hard copy of check
  • FedEx will track the shipment of the check
  • CONS
  • Expense
  • Human Error
  • Can they cash it?
  • Unreliable

15
US Dollar Wires (EFT)
16
Why Use US Dollar Wires (EFT)?
  • They are easy to track.
  • There is an electronic paper trail
  • They are quick to process
  • Payments are received in only a few days
  • Every ASC can make US Dollar payments to foreign
    vendors.
  • US accounts are made by CAMS
  • Foreign accounts are made manually by Finance

17
Why not a US Dollar Wires (EFT)?
  • Did you know it costs only 0.02 to process an
    EFT?
  • There are extra steps needed to obtain banking
    information for these transfers.
  • The only reason you would object to this type of
    payment is due to a currency issue.
  • The vendor does not want US Currency

18
What does Finance need for US Dollar Wires (EFT)?
  • If payment is a US Bank you must obtain
  • Bank Name
  • Account Name/Number
  • ABA
  • All banking information must be provided directly
    from the vendor
  • Email from Vendor
  • Vendor profile form
  • Invoice from vendor
  • If payment is made to a foreign bank, there is
    additional information you MUST have in order to
    process these payments!!!
  • Foreign Bank Information
  • US Intermediary Bank

19
What Foreign Bankinformation is needed to
process a US Dollar Wire?
  • Full address of the bank
  • Name on the bank account
  • Account
  • Swift Code similar to the US ABA but has
    letters/numbers and varies in length.
  • You still need Intermediary Bank information for
  • US Dollar Wires (EFT)

20
What is an Intermediary Bank?
  • An Intermediary bank is a US bank which can
    transfer US funds to the Vendors bank.
  • Each foreign bank has different US banks they may
    use.
  • Myths about Intermediary Banks
  • The Vendor must have a bank in the US - False
  • The Vendor must have an account with this bank.
    -False
  • The Vendors bank must have a branch in the US.
    False
  • So, how do you know which US bank to use?
  • Hint See the next slide

21
Where do you get the Intermediary Bank
information?
  • The vendor needs to call their bank and
  • Ask 3 simple questions
  • What US Bank do you accept US funds from?
  • Bank of America, Standard Chartered Bank, JP
    Morgan, etc.
  • 2. What is the City/State of this bank?
  • 99.9 are NY/ NY
  • 3. What is the 9 digit ABA for this bank?
  • All numbers, no letters

22
At a glance.US Dollar Wires (EFT)
  • PROS
  • Easy to track
  • Quick to process
  • Receipt of payments is only a few days
  • Every ASC can make this type of payment
  • CONS
  • There are extra steps required to obtain
    additional banking information.
  • Is there a currency issue for the vendor?

23
Foreign Currency
24
Foreign Currency Options
  • Foreign Currency Check The check is issued by
    the nearest State Department and sent to the
    Embassy closest to the vendor.
  • Foreign Currency Wire We pay the vendor via
    bank wire to their bank
  • This is a wire transfer directly to a foreign
    bank in foreign currency.

25
Foreign Currency Check
26
Foreign Currency Checks
  • 3 Step process
  • The US Treasury will send the foreign currency
    information to a local State Department who
    issues the check.
  • The check is sent to the Embassy closest to the
    vendor.
  • The Embassy will mail the check to the vendor.

27
Why should I sendForeign Currency Checks?
  • Customer Service
  • The vendor requests a check payment
  • The vendor requests foreign currency
  • Other exceptions
  • Countries will not allow the US to send a wire
  • US currency is not allowed in some countries
  • NO OTHER OPTION FOR PAYMENT

28
Why Not Foreign Currency Check?
  • We are unable to convert US funds into a foreign
    currency check.
  • We must have a foreign currency amount in order
    to use this payment type.
  • If we are supporting a meeting and will
    contribute US25,000 to the meeting. We cannot
    accurately convert the funds.
  • Our funds must be flexible for currency
    fluctuation.

29
What does Finance needto process Foreign
Currency Checks?
  • Vendor Profile Form accurate address/name of
    vendor who will cash the check is a must.
  • A specific amount of foreign currency and type of
    currency to use!!!
  • We cannot convert US funds.

30
At a glance.Foreign Currency Checks
  • PROS
  • Customer Service
  • Other exceptions
  • CONS
  • Unable to convert US funds

31
Foreign Currency Wires (EFT)
32
Why should I send Foreign Currency Wires (EFT)?
  • They are easy to track.
  • They are easiest for our vendors
  • They are quick to process
  • Payments are received within 3-5 days

33
Why not a Foreign Currency Wire?
  • There really is no reason to object unless the
    vendor prefers to receive US currency.

34
What does Finance need for Foreign Currency
Wires?
  • Vendor Profile Form
  • Full address of the bank
  • Name on the bank account
  • Account
  • Swift Code similar to the US ABA but has
    letters/numbers and varies in length.
  • The specific type of foreign currency!

35
At a glance.Foreign Currency Wires
  • PROS
  • Easy to track
  • Easy for our vendors
  • Quick to process
  • Quick receipt of payment
  • CONS
  • Is there a currency issue for the vendor?

36
Summary on Vendor Services
  • Make it easy for our vendors.
  • a. See which way is easiest for our vendors to
    receive funds.
  • See which way is quickest for our vendors to
    receive funds.
  • 2. Focus on Customer Service.

37
Summary for NOAA
  • What is the most reliable way for NOAA to send
    funds?
  • What is the cheapest way for NOAA to send funds?
  • What can NOAA do to satisfy our customers?
  • Create an assurance with our international
    vendors that NOAA is reputable and is working to
    create better payment services for them.
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