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EFT Program

This program applies to all Kroger affiliates.

The Kroger Co. Electronic Funds Transfer (EFT) program automates the transfer of funds and remittance information for all the Kroger division invoices received from their vendors. The EFT program will eliminate the manual process of printing and mailing checks for these invoices.

The EFT program will consolidate payments for all Kroger divisions into one payment made to a particular vendor on a given day. Electronically transferring the funds and remittance detail benefits both the Kroger Co. and its vendors. Integrating the payment information with a company's existing cash management system and payment application processing, will maximize these potential benefits. To begin an EFT program with the Kroger Co., please review this document.

The Kroger Co. does not feel a contract is necessary for beginning an EFT program with a vendor and will not participate with vendors who make a contract a requirement.

The EDI document will be sent within the CTX electronic document. The CTX document, in its entirety, will be communicated by Kroger's bank to the vendor's bank.

PROCESSING REQUIREMENTS FOR EFT

INITIAL CONTACT

• All invoices must already be set up on EDI.

• Complete the "EFT Vendor Set Up Form" and return to your Kroger Co primary department contact (i.e., Buying, Facility Engineering, Operations, Real Estate Dept etc.)

VENDOR BANK CONTACT

• The vendor's bank must be an EFT bank capable of receiving the payment order and remittance information.

• Provide Kroger's technical information.

• Determine, with the bank, how the remittance detail Kroger's bank will be transmitting will be supplied to you, the vendor.

• A full service EDI bank will be capable of providing the information in an EDI document, data format or a printed report.

• Complete all testing between you and your bank.

• Data Communication Testing.

• Correct and complete remittance reporting.

• The Kroger Co. will send no more than 3 small dollar tests. The vendor is responsible for completing all testing with their EFT bank prior to the small dollar test .

EVALUATION PROCESS

• Kroger will contact you to start the evaluation of the actual terms
  of the present check based payment method.

• Kroger will not initiate payment equal to or sooner than the
  current check reconciliation date without additional discount
  offerings from the vendor.

• If applicable, EFT discounts or additional days will be
  negotiated.

• The invoice must reflect the new terms.
  Kroger does not feel a contract is necessary for beginning an
  EFT program with a vendor and will not participate with
  vendors who make a contract a requirement.

TERMS / FLOAT

The Kroger Co. maintains a database of all pertinent dates on check payments. Dates kept are invoice date, payment due date, check printed date and the actual transfer of the funds from Kroger's account.

When a vendor is evaluated to begin an EFT program, an analysis of actual terms for the vendor's check payments is completed. Actual terms are defined as the length of calendar days between the invoice date and actual transfer of funds.

The Kroger Co. will not provide payments via the EFT program equal to or sooner than is currently being completed by the check based method unless a vendor provides additional discounts for EFT payments.

TESTING

• The Kroger Co. and vendor will create a tentative schedule for the
  small dollar test and conversion to production.

• Small Dollar Test

• Kroger will send a payment order to Kroger's bank for a small dollar amount. Remittance detail will be included for valid Kroger divisions, payment invoice numbers, and receivable numbers. Amounts will be changed to 0.05.

• The vendors will verify in writing the transfer of the funds into their account and the validity of the remittance detail.

• The possibility exists that the dollar amount for a particular division will be negative even though the total dollar for the entire company is positive.

• Kroger and vendor will mutually agree on the production cut-over date after a successful small-dollar test.

• Kroger will send no more than 3 small dollar tests. The vendor is responsible for completing all testing between them and their EFT bank prior to the small dollar test.

PRODUCTION

• A production date will be mutually agreed on by Kroger and the vendor.

• Questions regarding the detail and timing of specific remittance
  information will be forwarded by the vendor to the appropriate Kroger Accounting Center.

  • Payments scheduled to be made on weekends and bank holidays will be completed on the next bank working day. Kroger will observe the Federal Reserve Holiday Schedule.

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