EFT (electronic funds transfer)
EFT is the movement of the money itself. It arrives separately from the remittance that explains it, which is why the two have to be matched.
Updated
Electronic funds transfer (EFT) is the electronic deposit of a payer's payment into a provider's bank account. It is the money, and only the money: it carries no explanation of which claims it covers or how each was adjudicated.
The explanation travels separately, as the remittance advice. A payer sends the funds by EFT and the accounting by ERA, and the two arrive by different routes on their own schedules.
In practice
That separation is the whole reason reconciliation exists as a task. A deposit can land before its remittance, or a remittance before its deposit, and neither is a problem by itself — but a deposit that never gets matched to a remittance is money in the bank that no claim has been credited for, and a remittance with no deposit is a payment that was explained and never arrived.
The link between the two is a reassociation identifier the payer places on both. When it is present and used, matching is mechanical; when it is missing or ignored, matching becomes a manual search, and that is where unposted deposits come from.
Commonly confused with
- ERA / remittance advice: The ERA explains what a payment covers; the EFT is the payment. One is accounting, the other is cash, and they arrive separately.
- Payment posting: EFT is money arriving at the bank. Posting is recording it against the claims, which does not happen automatically because the EFT arrived.