ACH Origination is when a business initiates electronic payment to or from multiple people or businesses at one time and the funds are directly deposited or withdrawn from their account. Each group of people that money is distributed to or from at one time is considered a "batch".
Some examples include:
- Reimbursing employees for expenses
- Vendor payments/expenses
- Debiting memberships or dues (gyms, homeowners associations, etc.)
How does it work?
Step 1: Let Us Know
- Who you are planning to pay or pull payments from via ACH (employees only, employees and vendors, members, etc.)?
- How many people?
- An estimate of how much and how often (once a month, once a week, etc.).
Step 2: Approval & Agreements
The requested activity is reviewed and approved by a loan officer. ACH agreements are prepared accordingly. If you are withdrawing payment from others (for membership fees, etc.), you will need to obtain proper authorization. Sample authorization forms are provided in the ACH agreement.
Step 3: Upload a File of ACH Transactions
Once the signed ACH agreement is received, ACH Origination is added to your Online Banking under the Cash Management Tab and we set up your security token.. You upload a file with the ACH batch details by 3:00 p.m. two days prior to when the items should be paid (Example – if you want expenses reimbursed on Friday, you would need to submit and verify the batch by 3:00 p.m. on Wednesday). This can be a NACHA file exported from your accounting system, an excel spreadsheet, or manually typed entries (one time) set up to be recurring.
Step 4: Verification
Verifying each batch is an important security step we take to protect your account. You can either fax us a verification document (a template is provided) or call us to verify a batch.
Step 5: Transactions Completed
The funds are withdrawn from your account 2 business days prior to the effective date. Recipients receive their funds on the effective date.
FAQ: I receive ACH payments from my customers today, don’t I already have ACH?
If you are receiving credits or debits to your account via ACH, but you are not initiating the activity, then it is likely your customer is using ACH Origination to pay or charge you. You should see no fees for this use of ACH on your end.
There are fees associated with ACH Origination which may be offset by balances in a Commercial Analysis Account. For more information about ACH Origination, contact your local branch or call us at 443-262-9310.