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Business Owners: Are You Ready for Same Day ACH?

Posted by Concannon Miller on Tue, Aug 9, 2016

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Business Owners: Are You Ready for Same Day ACH?Beginning Sept. 23, 2016, the electronic payment association NACHA has adopted a new rule to allow same-day processing of ACH – or automated clearing house – payments.

Currently most ACH payments settle on the next business day. This new rule includes a “Same Day Fee” on each same day transaction that many ACH originators may not be aware of.

If you process your own payroll via ACH or if you use a payroll processor that pays via ACH, you need to be aware of these changes. It is now critical to be aware of the EED (Effective Entry Date) and ensure it accurately reflects the type of transaction.

Under current rules, all ACH transactions settle the next day at the earliest so if the EED is incorrect, it is ignored and the ACH transaction is set for next day settlement. Many ACH originators have hard-coded their ACH software to set the EED as the same day of the file creation and it would always result in next day settlement.

READ MORE: Tips for Business Owners to Reduce Credit Card Chargebacks

As of Sept. 23, the same day ACH credits will be identified by looking at the EED. For example, if you initiate ACH credits in the morning using the current date in the EED field, those items will transmit to the network as ACH same day transactions and each one could be charged a same day fee.

To avoid these potential ACH fees, users must be aware of the dates they enter into the EED field. If you use a third party vendor for payroll or payable, you should check with that vendor to make sure they are aware of this change and that they are entering the correct EED date.

Points to consider:

  • Does your bank or your payroll/payables vendor bank offer same day ACH?
  • Do you create ACH files and upload them to a bank?
  • Does your payroll or accounts payable processor create ACH files on your behalf to a bank?
  • Do you or your processor upload your ACH files in the morning?
  • Do you accurately specify the EED (Effective Entry Date) for your transactions?


For more information, check out this website: https://resourcecenter.nacha.org/?q=node/106

Topics: Business consulting

Concannon Miller’s unique, holistic and intimate approach to financial health sets us apart from smaller CPA firms with more limited resources as well as mega firms where mid-sized clients struggle for attention. Contact us here to talk about improving your business.

This communication is designed to provide accurate and authoritative information in regard to the subject matter covered at the time it was published. However, the general information herein is not intended to be nor should it be treated as tax, legal, or accounting advice. Additional issues could exist that would affect the tax treatment of a specific transaction and, therefore, taxpayers should seek advice from an independent tax advisor based on their particular circumstances before acting on any information presented. This information is not intended to be nor can it be used by any taxpayer for the purposes of avoiding tax penalties.

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