What Is EFT In Accounting, EFT VS ACH and Wire transfer?

What Is EFT In Accounting?

EFT (electronic fund transfer) is a method of moving money from one account to another. The transaction is carried out electronically, and the two accounts might be at the same or separate financial institutions. The name “EFT” does not, however, relate to a specific form of payment. It is, in fact, an umbrella term that encompasses a wide range of electronic payments, including wire transfers and BECs transfers.

What Are The Four Most Common Types Of Electronic Fund Transfer EFT?

  1. Checks in electronic form. When the payer authorizes this payment, a digital statement is created.
  2. Deposit through direct deposit. Direct deposit is a method of depositing funds into an account that requires little to no documentation.
  3. Phone Bill Payments.
  4. Transactions at ATMs.
  5. Transactions Using a Credit Card.
  6. Transactions on the internet.

What Is EFT Cash Payment In Bank Reconciliation?

Bank reconciliation is one of the most popular cash control procedures. Every bank statement in a firm should be reconciled immediately by someone who is not otherwise involved in the cash receipts and disbursements processes. The Cash account reconciliation is required to discover mistakes, inconsistencies, and changes. By requiring cooperation for unlawful activities, having an independent individual draught, the reconciliation helps to create separation of tasks and deters fraud.

There are several formats for the reconciliation process, but they all achieve the same goal. The reconciliation compares the cash amount displayed on the monthly bank statement to the cash amount recorded in the general ledger.

Is EFT The Same As ACH Transfer?

ACH and Wire Transfer services are both included in EFTs. Because EFT is a broad word encompassing many different forms of financial transactions, ACH transfers are sometimes referred to as EFT transfers. Electronic Transfers encompasses ACH, and an ACH is always an EFT.