Most ERP solutions today such as NetSuite, Acumatica and Dynamics GP to name a few, allow you the ability to use a NACHA file to electronically handle certain transactions. As many of our customers would like to use these features, I thought it would be a good idea to de-mystify the NACHA File and how it can be used to make certain processes more efficient and less error prone.

  • I guess a good place to start is what exactly does NACHA stand for?
    • National Automated Clearing House Association
  • What is the purpose of a NACHA File?
    • A NACHA file is a way to communicate requests to transfer funds electronically between accounts.
  • What is the ODFI?
    • Originating Depository Financial Institution
      • Originating Depository Financial Institution
      • The ODFI is a banking term in the United States used in connection with Automated Clearing House (ACH). In the ACH flow, the ODFI acts as the interface between the Federal Reserve or ACH network and the originator of the transaction.
    • What types of transactions can be handled using a NACHA File?
      • Payroll Transactions
        • direct deposit Payroll Transactions
          • ACH Transactions
            • These are transactions that use an electronic network that allows banks and their customers to send funds between one another in the United States. Basically, when you pay a bill online and opt to use a ‘bank account’ rather than a credit card, your payment is being processed through the ACH network. ACH Transactions
          • Positive Pay
            • Positive Pay is an automated fraud detection tool offered by most banks. In its simplest form, it is a service that matches the account number, check number and dollar amount of each check presented for payment against a list of checks previously authorized and issued by the company to the bank electronically. Positive Pay
          • Electronic Bank Reconciliation
            • Electronic Bank Reconciliation allows you to download and import your bank statements electronically from your bank and automatically reconcile all entries that match. Electronic Bank Reconciliation

 

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