Electronic Funds Transfer (EFT)
Also known as: EFT
Electronic funds transfer (EFT) is the movement of money between bank accounts electronically, without paper cheques or cash.
EFT covers the electronic transfer of funds from one account to another, and in B2B procurement it is the standard way to pay suppliers. It includes bank transfers, direct credits and interbank payment systems, offering faster settlement, lower handling costs and better traceability than cheques. Payment details are captured once and reused for each payment run.
For accounts payable, EFT reduces fraud risk associated with cheques, speeds up settlement and produces electronic records that reconcile easily with invoices and remittance advices. Accurate supplier bank details and strong internal controls are essential, since erroneous or fraudulent account changes are a common source of payment loss.
Frequently asked questions
- What is electronic funds transfer (EFT)?
- EFT is the electronic movement of money between bank accounts without paper cheques or cash; in procurement it is the standard method for paying suppliers.
- What are the benefits of EFT over cheques?
- EFT offers faster settlement, lower handling costs, better traceability and reduced fraud risk, and it produces electronic records that reconcile easily with invoices.
Related terms
Payment Run
A payment run is a scheduled batch process in which an organisation pays multiple approved supplier invoices together at set intervals.
Read definitionRemittance Advice
A remittance advice is a note a buyer sends a supplier to confirm which invoices a payment covers.
Read definitionAccounts Payable (AP)
Accounts payable (AP) is the money an organisation owes its suppliers for goods and services received but not yet paid for, and the team that manages those payments.
Read definitionPayment Terms
Payment terms are the conditions agreed between buyer and supplier setting when and how an invoice must be paid.
Read definitionExplore related across the knowledge graph
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