Wire Transfers

Purpose
This instruction is to provide procedures for the processing of an order to pay funds electronically by wire. A bank wire transfer is a message to the receiving bank requesting them to effect payment in accordance with the instructions given. Wire transfers are generally issued to foreign (international) payees only. Domestic payees are generally paid via check or EFT unless extenuating circumstances exist.

Applicability and Authority

Definitions
Bank Codes: o ABA (American Banking Association) o BIC (Business Identifier Code) o CLABE (Clave Bancaria Estandarizada translates to Standardized Bank Code in English o IBAN (International Business Account Number) o IRC (International Routing Codes) o SWIFT (Society of Worldwide Interbank Financial Telecommunication) Banking Information Data from the payee indicating their bank name, bank account number, ABA and/or routing numbers necessary to transmit funds. Payment Request Form The Payment Request Form is to request payment by any method other than a wire. The Payment Request Form is used when a Purchase Order is not required and for items listed on the Payment Request Usages List. See Payment Request Procedure. Invoice This is the document rendered and sent by the supplier to bill the Institute for goods and services. Purchase Order A formal document used to commit the Institute to a transaction with a supplier. Wire Request Form This form specifies the request to be conducted by method of wire and includes the banking information for the payee, expense distribution and invoice numbers associated with the funds transfer. Wire Transfer A bank transfer of funds electronically transferred from one bank account to another.

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Procedure
General Provisions EFTs or electronic funds transfers are always a preferred method of payment as it avoids the fees incurred with manually transmitted wires. Whenever possible, it is an advantage to set up a supplier as an EFT payee through Supplier Management. Only when an EFT transaction is not possible should we consider sending a wire transfer. Prior to submitting the wire to the bank for funds transfer, all processes must be complete and the invoice be placed into a disposition to pay. This includes obtaining an accurate invoice from the supplier, entering the invoice into Oracle to successfully match and validate against the PO (when a PO is required), and/or secure any manual approvals necessary. Effectively, the invoice or supporting documentation for the Wire Transfer Form must be properly approved, supported and processed for payment before it can be submitted for a wire transfer. Coordination of Policies and Adherence to Standard Operating Procedures As with any other payment issued by the Institute, standard operating procedures apply to all wire transfer requests. For example, when standard operating procedures require a purchase order be rendered for the purchase of goods or services over a certain financial limit, the procedure must be followed within the guidelines set forth by Procurement Services. In the event that the payment falls under the Payment Request procedure, it is not necessary to complete the payment request form when the payment will be a wire. In the case of a wire, the Wire Transfer Form is acceptable in lieu of the Payment Request form. All procedures, coordination and approvals are required to take place in order to comply with set policies. Standard operating procedures of the Institute cannot be circumvented merely because the method is a wire transfer. Responsibilities Requestor Requestors are responsible for obtaining and supplying supporting documentation from the supplier in order to complete the wire transfer. This includes the invoice and banking details for the payee in question. Requestors are required to secure supplier banking information from the payee on payee letterhead for submission to Payment Services along with the completed and approved Wire Transfer Request Form. Buyers/Purchasing/POs - Purchase Orders for required transactions must be completed and approved prior to the transfer of funds. Suppliers must provide invoices for such transactions. Proforma invoices are acceptable for prepayments and deposits. Payment Services - The Payment Services Department is responsible for reviewing the Wire Transfer Request Form for accuracy, verifying that all supporting documentation is attached and meets with Institute policy. Payment Services will verify the suppliers banking information and

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coordinate payment transfer with the Disbursements Department. All requirements must be met prior to submission of transfer. Disbursements The Disbursements Department or designee is responsible for reviewing the Wire Transfer Request and will process the transfer through the banking system. Wire Approver This individual is charged with authorizing the wire be transacted through the banking system. This individual is separate from the initiator, processor or approver of the wire.

Procedures International Wires Wire transfers will only be authorized for international payments or payments to bank accounts outside the United States. Domestic Wires Domestic payments are those made within the United States and are generally completed by check or EFT, therefore wire transfers are discouraged. This is due in part to the fees involved with wires. When domestic payments can be completed via an EFT, it is more prudent and less expensive to do so. Only in rare and extenuating circumstances where a check or EFT would not be feasible will domestic wires be authorized. The requestor must state the reason why a domestic wire is being called for on the Wire Transfer Form. Processing and Cutoff Periods Note that standard processing time of two (2) to three (3) business days is required to process all wire requests. In rare, urgent or emergencies cases, the department should coordinate same day wires with the Payment Services Department to ensure that the transfer can be processed without delay. Same day wire requests may not be possible depending on the closing of the banks wire office. Requests will be processed when all supporting documentation, banking information and other requirements have been met by the requestor. Requests for immediate or same day wires must arrive to Payment Services by 11:00 AM in order for the order to be processed.

Dark Period During the last two days of each calendar month, the Payment Services Department goes into a dark period, unable to conduct wires until the month end closing process has been settled. During this time, we are unable to process wire transfers and book the expense to the appropriate PTA. Payment Settlements Deposits to payee accounts depend on the beneficiary bank and the country where the beneficiary is located. In some cases, depending on the country of the beneficiary, a wire may process through several intermediary banks before arriving at the final destination. This can delay the deposit time.

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Generally speaking: US dollar domestic wires hit the payees bank on the same business day US dollar international wires (to a foreign bank) generally take 2 to 3 business days Foreign currency wire can take up to 5 to 6 business days to hit the foreign bank account

Wire Transfer Request Form The department requesting the wire transfer shall complete the information on the Wire Request Form. This form can be obtained from the Procurement Services website here: http://procurement.caltech.edu/forms Attach all supporting documentation and submit this form with all attachments to the Payment Services Department. For faster service, please scan and email all documents to the following email address marked priority: [email protected] Note that you should retain your originals. Do not interoffice these as originals are not required when you email requests to Payment Services. Below is a replica of the wire transfer form for visual reference.

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Banking Information Payee banking information is necessary when establishing new payment transfers. The payee must provide their bank information on their company letterhead or directly printed on their invoices. When this information is not printed directly onto the supplier invoice, it is important that banking information be obtained from the vendor, supplier or payee in writing on their letterhead. This any possible error and reduces the risk associated with verbal communication. The supplier must provide the necessary information to order the wire from the bank. This includes the following, but may also require country specific routing codes as well: Beneficiary Name (If different from the supplier name) Bank Name ABA or Routing Number Bank Account SWIFT Code BIC Code IBAN (for International Wires) CLABE # (for Transfers to Mexico) IRC (Code is Country Specific)

Avoiding Delays or Additional Fees on Outgoing Wires Be sure to provide complete Beneficiary Information including name and account number. If you are unsure of the Beneficiary information, please contact the recipient (beneficiary) for complete routing instructions. If they are unsure, they should contact their bank for this information. Information for International Wires Wires transmitted to foreign countries have various different requirements and wire codes, depending on the receiving country. All wire transfer payments destined for Europe should include the SWIFT Bank Identifier Code (SWIFT BIC), International Routing Code (IRC) as applicable, and for participating countries the beneficiarys International Bank Account Number (IBAN). Mexican banks require a CLABE number in addition to the SWIFT BIC. International Routing Code (IRC): Some countries throughout the international banking community have created international routing codes, which are used in combination with the SWIFT BIC to aid in routing the payment through a main office to a branch. Each country has a specific name for their routing code (i.e., Sort Code in the United Kingdom, Canadian Payments Association Routing Numbers in Canada). Your beneficiary must provide the international routing code to facilitate receipt of an international payment. This information should be placed into the IRC field located on the Wire Transfer Form. Sending a wire without the IRC number can delay the wire, or the receiving bank may return the wire when this number is not included in the payment instructions, and additional fees may be assessed.

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Process Flow
Requestor obtains banking details from supplier. Payment Services posts payment into Oracle & submits to Disbursements Wire documents filed in A/P for future reference.

Requestor completes wire transfer form

Disbursements verifies documents and generates wire in banking system

Wire approver to authorize transfer

Disbursements maintains wire transaction log for audit purposes Requestor attaches supporting documents, invoice, etc.

Payment transmitted to supplier

Process Complete Obtain formal approval on wire form

Submit documents to Payment Services for processing

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Exceptions
Any exceptions or requirement that requires a deviation from this Procedure shall be reviewed and approved by the Director of Procurement Services.

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