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Business ACH management for credit unions

Business ACH for credit unions allows organization users to submit groups of payments called “batches.” Each batch contain organization information, recipient details, and offset transaction information. These types of payments are typically used for payroll, accounts payable, and accounts receivable. Prior to processing batches via the ACH network, credit unions may also have a series of checks to perform on ACH files. This includes but are not limited to the following:

Balance checks that verify the offset account has the funds to cover ACH credits (outgoing transactions) in the batch.
Compliance and regulatory checks (BSA, AML, OFAC, etc.).

For access to Business ACH functionality in Banno Admin, the admin user must have the Banno People Manage Business ACH or Manage everything permission enabled.

Batch life cycle

Depending where a batch is in its life cyle, it can be in one of the following states:

Ready
Initiated
In process
Processed

Ready

The batch is created by an organization user, and it is noted with a Ready status in Banno Online and Banno Admin. The organization user can still edit batch details and the recipient list or delete the batch. The organization user can also choose to initiate or delete the batch.

Initiated

The organization user completes any batch edits and signals to the institution that the batch can be processed. They specify an effective date and the offset account that applies to the batch. When the organization user initiates a batch, its status changes from Ready to Initiated. The batch displays as Initiated in Banno Admin and Banno Online.

In Banno Admin, the batch is noted as Initiated and the effective date displays.

To edit the batch, the organization user must un-initiate it. This removes the offset account and effective date, and it changes the batch status from Initiated back to Ready.

In process

When an admin user begins daily processing of all eligible batches in Management, the batch is no longer initiated but in process. Batches that are in process only display in the Process batches screen in Banno Admin.

The batch cannot be edited or deleted by an organization user, but it can be deleted by an admin user.

Processed

When an admin user successfully finalizes a batch, the batch displays in the History list. The batch cannot be edited or deleted. It also signifies that a finalized file with this batch has been generated.

In Banno Online, the batch also moves to the History list on the ACH dashboard.

The Banno Digital Banking Platform does not update historical batches with ACH exception information that may be returned from a credit union’s ACH processor.

View and search ACH batches

Banno People
ACH
Management
ACH Management

Each time an organization user successfully uploads a batch in Banno Online, an admin user can view the batch and its details in the ACH Management screen. Depending where batch is in its life cycle, a batch displays in the Active list, Processing batches screen, or History list.

Active: The Active list displays batches noted as Ready or Initiated. Admin users can filter ACH batches by status and sort them based on a default list of batch details such as batch name, organization name, total credits, etc.
Processing batches: Batches that are in process display in the Process batches screen.
History: The History list displays batches that have been processed. After an admin user successfully completes a batch process, each batch moves from the Active list to the History list. Batches that appear in the History list cannot be edited or deleted. Admin users can search for historical batches using the effective date calendar filter.
The Banno Digital Banking Platform does not update historical batches with ACH exception information that may be returned from the credit union’s ACH processor.

Batch details

Admin users view a batch’s details and recipient information by selecting an individual batch. Depending where a batch is in the life cycle, specific details may or may not displays in the batch details.

Effective date

In Banno Online, the date an organization user selects a date for ACH transactions to affect the recipients’ accounts. Batches with an Initiate status, batches in process, and processed batches display the effective date in the batch details.

In the event that batch research is required, an organization user knows the selected effective date. They may not necessarily know the process date because the process date is when the institution finalized (processed) the file. While the effective and process date should be the same, interruptions in credit union processing may result in different dates.

Process date

In Banno Admin, the date a file with the batch was finalized by an admin user. In addition to the effective date, processed batches also display the process date in the batch details.

The process date is not a guarantee of ACH transactions posting to recipients’ accounts. Transaction posting involves many external dependencies that are outside of Banno’s control i.e. file transmission, processing exceptions, early funds availability, etc. In some cases, it might be later or earlier in the core.

The effective and process dates that display in the Banno Digital Banking Platform only provide activity information specifically related to ACH batches inside the platform. Once a NACHA file is finalized and the process date displays in the batch details, the institution is still responsible for transmitting the NACHA file to the Federal Reserve.

Offset transaction

The offset transaction is reflected in the batch details throughout most of the batch life cycle. When a batch is ready, the organization user has yet to select an offset transaction so the batch details do not show balanced. Once a batch is initiated, the batch details display the offset transaction in the batch totals from that point forward in the batch life cycle.

Process batches

According to an institution’s internal policies and procedures, the admin user first needs to process batches that organization users have uploaded. Then, they can finalize and download the batch information formatted in to a NACHA file and submit the NACHA file to the Federal Reserve. In Banno Admin, an admin user can process batches at any time and repeat the cycle as often as needed. Processing batches involves the following steps:

Gather batches to be processed that day
NSF check (optional)
Download NACHA file for external verification of payments (optional)
Delete batches, if necessary
Repeating the process until all checks pass
Finalize and download the NACHA file

Begin processing batches

Banno People
ACH
Management
Process batches

Processing batches starts when the admin user clicks the Process batches button in the ACH Management window. The admin user automatically navigates to the Process batches screen where they can run optional checks or finalize and download a NACHA formatted file. All batches with an Initiated status and have an effective date plus one business day—for processing—are gathered for batch processing. Batches with older effective dates are also included.

Run a NSF check

The Banno Digital Banking Platform displays flagged batches so that institutions can direct their decisioning process. If a batch is flagged with an NSF check error (NSF or Error), no automatic decisioning occurs with the batch. The batch remains in the list and will be included in the finalized file, unless the institution takes further action. The institution should refer to their internal policies and procedures for decisioning when handling flagged batches.

NSF stands for not sufficient funds. An admin user can choose to have each batch checked for insufficient funds by clicking NSF check—this is an optional step when processing batches. The NSF check aggregates batch totals and verifies that the organization has enough money in its offset account to cover the batch(es) of payments that they are sending. When the NSF check successfully completes, tallied results display as a summary statement in a banner.

If an organization submits multiple batches with the same designated offset account, the NSF check verifies the aggregated batch total against the offset account’s Available Balance in core. If the offset account does not have sufficient funds to cover all the aggregated batches, then each individual batch is flagged.

If the NSF check is successful and funds are available, no changes display in the batch list items.

If a batch has insufficient funds, the batch list item displays a NSF flag and sorts to the top of the batch list. The NSF check occurs in real-time and offers the institution flexibility in their decisioning process. For example, sample steps for handling a flagged batch that an institution may take include:

See if the organization has overdraft transfer or tolerance set up for the offset account.
Contact the organization and have them fund the offset account.
Note any reasons why an NSF would be allowed to process.

Having a NSF flagged batch doesn’t prevent an admin user from downloading the NACHA file or finalizing and downloading a NACHA file for submission. If the institution decides to not include the flagged batch in the finalized file, an admin user must delete the batch.

Error with the NSF check
If a batch is flagged with an Error during the NSF check, the check attempted and was unable to verify the batch’s offset funds. This can occur with connectivity issues to the core or with the core itself. The admin user may choose to re-run the NSF check again by clicking Retry or manually check the core for sufficient funds.

Rerun NSF check

If there are NSF flagged batches, the NSF check can be re-run as necessary. Each time an admin user runs an NSF check, every batch is reverified.

Download NACHA file

An admin user can choose to download the NACHA file for third-party security checks, such as OFAC, by clicking Download NACHA file—this is an optional step when processing batches. The NACHA formatted file then downloads to the admin user’s browser.

Finalize and download

When the finalize and download process is complete, the step cannot be reversed and batches are no longer editable. An admin user cannot regenerate the NACHA file. Successfully processed and finalized batches permanently display in the History list on the ACH Management dashboard.

When and admin user indicates that checks and verifications are complete, they click the Finalize and download button to generate the NACHA file for transmission. Before finalizing the batches, the admin user reviews the following batch summary details in the Finalize and download window:

Number of batches
Total amount of credits and debits
Total number of credits and debits

The admin user can also click Print summary to obtain a hard-copy of the processing batch summary details.

After the admin user clicks Finalize and the NACHA file successfully downloads to the admin user’s browser, a success dialogue displays. The NACHA file can then be transferred to the Federal Reserve according to the credit union’s internal policies and procedures. The Banno Digital Banking Platform does not offer functionality for transferring NACHA files.

If the batch process fails, an error dialogue displays and advises the admin user to try again or contact support. The admin user can close the dialog and try finalizing the batches again. It is unlikely that issues with the batches cause errors. In most cases, errors are due to connection issues in the core and require assistance from Banno support.

Continue processing

If an admin user starts processing the batches and has yet to finalize and download the file, the Finalize and download button displays as Continue processing to all admin users. This indicates that the current batches are in process and need to be finalized before additional batches can be processed. If needed, a different admin user can complete the batch processing.

Delete a batch

Using the delete button, admin users can delete an individual batch from the Banno Digital Banking Platform. If a batch should be deleted, the admin user needs to refer to their institution’s internal policies and procedures. This action cannot be undone or recovered, and the credit union must notify the organization that they need to resubmit and reinitiate a replacement batch.

Banno recommends beginning batch processing after the batch submission cut-off time to ensure that all batches for the following day’s effective date are processed correctly. When an organization resubmits and reinitiates a replacement batch, the following business day is unavailable as an effective date. Therefore, the organization should be warned that transactions will be processed one business day later than intended.

Activity

The Banno Digital Banking Platform captures activity for an admin user performing the following events:

Begin batch processing
Delete a batch
Finalize batch processing

We are working to support displaying the events in Banno Admin.