Understanding ACH - Overview and Terminology

Description

Any organization which originates a debit or a credit transaction via the Automated Clearing House (ACH), destined for your members' accounts.

Refers to the file on CU*BASE which records data about ACH records, including any distributions to be made to individual member accounts. This file also translates the account numbers, names, and other data that is received via ACH into the correct account information on CU*BASE.

When a new ACH item is received, the system automatically creates a “skeleton” master distribution record, matching account numbers as best it can. This record can then be maintained to specify the exact account numbers to be used and set up any subsequent distributions the member requests.

A file (ACHSUS) used by CU*BASE to “store” all ACH items until they are posted to member accounts. This file is sometimes referred to as the “suspense” file.

• For online credit unions, items are posted from this file twice each day: credits dated on or before the current date are posted in the morning; debits dated on or before the current date are posted in the evening.

Three fields that identify the member to ACH; all are determined by the Originating Company and may or may not match CU*BASE member records.

• For example, John Smith asks his insurance company to take his monthly payment directly from his checking account. He provides a copy of a deposit slip to his insurance company and they use the MICR line to determine the Depositor Account number when originating the item.

• When the ACH item is set up, it shows a Depositor Account # of 123201 (taken from an old deposit slip), a name of JW Smith, along with the insurance company's ACH Company ID.

• CU*BASE records show John's checking account is actually 1232-001, and his name is recorded as John W. Smith. The CU*BASE ACH master file would be set up to “translate” the ACH account information to match CU*BASE membership information.

The member's account base and account type suffix as recorded by CU*BASE.

The term used for an ACH item which could not post to a member account for some reason, such as insufficient funds, account closed, cannot find matching account number, etc.

These items are placed into the ACH Suspense/Exceptions G/L account (870-11) and listed on various ACH exception report to be handled using the Work ACH Daily Exceptions handling system.

An ACH transaction item with a zero dollar value. The item may be sent through as a way to set up and test the transaction before any funds are actually sent. This allows the receiving credit union the chance to check for errors and set up distributions in preparation for the actual transactions.

• Pre-Note transactions are not added to the warehouse file when normal transactions are processed. Instead, the system simply creates the ACH master records in anticipation of receiving the actual debit or credit item.

A numeric code that is assigned to every transaction received via ACH. These codes indicate the type of transaction (deposit, withdrawal) and type of account (savings, checking). There are also special transaction codes for items being returned or changed.

• NOTE: In addition to the Tran Codes assigned to incoming ACH items, the CU*BASE master ACH file also requires distribution codes to be assigned to all distributions. These are alphabetic codes used only within the CU*BASE system.