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ACH Overview
An Automated Clearing House (ACH) transfer is the electronic transmission
of a file which contains pertinent information to the movement of funds
between accounts. An ACH transfer is commonly used to expedite
direct deposit of payroll, pay bills, concentrate funds from other financial
institutions or collect membership dues. An ACH transfer generally consists
of multiple transactions and is referred to as a “batch”.
The steps for setting up an submitting an ACH batch are typically as
follows:
1. Define participants
2. Define batch attributes
3. Assign participants to the batch
4. Submit the batch
5. (Optional) Check on pending/recent activity
6. (Optional) Edit and re-submit the batch
The above steps are typical for an ACH user. For an ACH administrator, the
main action occurs after the batch submittal. If the batch requires approval
for any reason (for example, it exceeds the user’s per-transaction or daily
limits), it is given a status of Pending. The administrator then uses the ACH
Approval function either to approve the batch as-is or to deny it and send it
back to the user for modification.
Note that a batch may be used multiple times once steps one through
three are completed. You only need to complete steps one through three
again when something changes. For example, you may need to add new
participants or remove old ones. In typical usage, simply submitting an
ACH batch will be sufficient. Note also that participants may be used in
more than one batch.