ACH Origination

This document provides technical guidance for users of the FLEX system regarding the ACH Origination module. ACH Origination is an optional module designed to facilitate the transmission of debits or credits from a credit union to another financial institution on behalf of its members.

1. Overview of ACH Origination

Purpose: Allows credit unions to transmit ACH (Automated Clearing House) debits or credits for members.
Module Type: Optional; requires purchase and configuration.
Processing Options: Files can be processed by FLEX or a third party.
Internet Banking Integration: Available for credit unions that have purchased both ACH Origination and internet banking services.

2. Accessing ACH Origination

The ACH Origination module is located within the FLEX Main Menu:

Navigate to: ACH/ACH Origination

3. ACH Origination Screen Layout

The ACH Origination screen is a split-screen interface, divided into two main sections:

Top Half: Company Records
- Displays records for companies associated with ACH origination.
- A company record must be set up before member origination records can be added.
- If no company records are present, contact the FLEX training department.
Bottom Half: Member Account Records
- Displays individual member origination records linked to a selected company.

3.1 Searching and Filtering

Search Functionality: A search can be performed by account number or company name.
Clear Filter: Resets any applied filters.

4. Adding and Editing Origination Records

To manage origination accounts:

Select Company: Highlight the desired company in the top panel.
Access Accounts: Click the Accounts button to view existing origination records for that company.
Add New Record: Click Add on the bottom panel to create a new origination account record.
Edit Existing Record: Click Edit to modify an existing record.

4.1 ACH Add ACH Origination Screen

This screen is divided into two primary sections, each with specific fields:

Top Section (Credit Union Account – Outlined in Red on screen):
- Applies to the member’s account/suffix at the credit union.
- Processing Information:
  - Frequency: Select how often the record will occur.
    - Date increments by one frequency after each processing.
    - Unscheduled frequency does not increment.
    - One Time Only transactions do not cycle and are removed after processing.
  - Pre-Note Date:
    - If desired, a pre-notification record (zero dollar amount) will be sent on this date.
    - Commonly used to verify information at the receiving financial institution.
  - Next Processing Date:
    - Informs the processing program when to include the record in the ACH Origination file.
    - Increments by one processing frequency after each detail record is processed.
    - Note: This is not the date the item posts to the member’s account.
  - Adjusted Processing Date:
    - Calculated based on the Next Processing Date.
    - Normally the same, but advanced to the next business day (or previous, depending on configuration) if the processing date falls on a holiday or weekend.
    - A Federal Holiday listing is used for adjustments.
  - Fed Effective Date Adjustment:
    - Used to calculate the Effective Date.
    - Enter the number of business days after the processing date the transaction will post to the member’s account.
    - Can be zero or one day prior for transaction codes 27 and 37 (debit at other FI).
    - Can be up to two days prior for transaction codes 22 and 32 (credit at other FI).
    - Note: Same Day ACH was effective September 15, 2017.
  - Effective Date:
    - Informs the processing program when to post the transaction to the member’s account on FLEX.
    - This is the effective date in the ACH Origination file and the day the amount posts to the ACH Origination general ledger offset account.
  - Frequency Calculation Date:
    - Used for inconsistent monthly posting dates (e.g., 29th, 30th, 31st).
    - Enter the Next Processing Date normally, then enter the desired posting date here.
    - The program only considers the day of the month.
    - Example: If origination should post on the 29th, but a month doesn’t have 29 days, the system will post on the 30th and revert to the 31st if applicable.
  - Member Transaction:
    - Account/Suffix: Defines the member account and suffix to be debited or credited.
    - Transaction Description: (Optional) If entered, this description applies to the member’s account history. Otherwise, the merchant description is used.
    - Fee Amount: Enter if a fee is charged.
    - Fee Account/Suffix: If a fee is entered, this indicates the account and suffix for fee posting. If left blank, the fee posts to the same account as the transaction.
    - IRA Code: Required if the credited member suffix is an IRA suffix (only available if an IRA is selected).
    - Verify Account Balance:
      - Check box to verify balances before processing.
      - Credit to Receiving FI (Codes 22, 32): If checked, program verifies and holds funds in the member’s share account. If available balance is less than the transaction amount, the item will not process. If unchecked, the item processes and may cause a negative balance.
      - Debit to Receiving FI (Codes 27, 37) & Share Suffix: This option is ignored.
      - Debit to Receiving FI (Codes 27, 37) & Loan Suffix: Program verifies the loan payoff amount is not less than the transaction amount. If it is, the transaction amount is adjusted to the payoff amount (calculated as of the effective date).
    - Consider Loan Due Date:
      - If checked and the member suffix is a loan suffix, processing date and effective date are ignored.
      - Transaction processes only when the loan payment is due.
      - If unchecked, transaction processes based on the frequency in the origination record.
    - Use Loan Payment Amount:
      - If checked and the member suffix is a loan suffix, the transaction amount adjusts to match the required loan payment (less any partial payments).
      - If unchecked, the transaction amount remains as entered in the origination record.
  - Bottom Section (Receiving Institution – Outlined in Blue on screen):
    - Applies to the ACH transaction as it applies at the other financial institution.
    - Company: Displays the Company Name from the ACH Origination header record.
    - Transaction Code:
      - Identifies various types of debit and credit entries to the receiving institution.
      - Supported Codes:
        
        22: Deposit for checking, NOW, and share draft accounts (credit).
        
        27: Payment for checking, NOW, and share draft accounts (debit).
        
        32: Deposit for savings accounts (credit).
        
        37: Payment for savings accounts (debit).
        
        42: Financial institution general ledger (credit).
        
        47: Financial institution general ledger (debit).
        
        52: Loan account (credit).
      - Important Note: A credit transaction code (22 or 32) will result in a debit to the member’s account at the credit union (must be non-IRA shares). A debit transaction code (27 or 37) will result in a credit to the member’s account (can be shares or loan).
    - DFI Account Number:
      - Contains the Receiving DFI’s customer identification.
      - Obtained from the On-Us field of the MICR line on a voided check or deposit ticket.
      - Include dash cue symbols (recorded as hyphens ‘-‘).
      - Enter only numbers (0-9) and hyphens. Left justify and leave unused spaces.
      - Exact format is crucial for standard positioning at the receiving institution.
    - Receiving DFI ID: Identifies the Receiving Company and contains its routing and transit number.
    - Individual Name:
      - PPD (Prearranged Payment and Deposit): Field entered by the Company for recipient identification.
      - CIE (Customer Initiated Entry): Field entered by the originating DFI for recipient identification. For CIE, store the Individual ID number in this field and the Name in the ID field.
    - Transaction Amount:
      - The debit or credit amount the Receiving DFI posts.
      - A specific amount is required for all non-pre-notification transaction codes.
      - Pre-notification transactions should have a zero amount.
      - The amount should only be included on the live item.
    - Individual ID Number:
      - CIE Individual ID Number: Accounting number by which the individual (payer) is known to the Company (payee). Used for updating accounts receivable records.
      - PPD Individual ID Number: Accounting number by which the individual is known to the Company. Included for further identification and description.
    - Discretionary Data: (Optional) Allows Originating DFIs to include internal codes for specialized handling. No interpretation of value. Can be a single two-digit code or two one-digit codes.
    - Addenda Information: (Optional) Generated by the Originating DFI. Single or multiple data fields may be included, but only specific formats with approved values can be used.

5. ACH Origination Processing

To process ACH Origination transactions:

Initiate Transmission: Click the Transmit button on the main ACH Origination screen.
File Generation: This action builds and sends the origination file to the I:drive for further processing or directly to the credit union’s ACH processor.

5.1 Initiate ACH Origination Transmission Parameters

When initiating a transmission, configure the following parameters:

Delay Until:
- Leave blank to start the process immediately.
- Select a time from the drop-down to start the process later.
Effective Date:
- Defaults to the current date, but can be changed.
- Indicates the effective date for posting origination items.
- Any pending originations on or before this date will attempt to post.
Build New File:
- Check this box to build the origination file.
- File will include all ACH Origination items with a Pre-Notification Date or Next Processing Date on or before the current date.
Build Report:
- Check this box to generate a report of all items in the file.
- Allows review and correction of items before sending the file (if Send New File is unchecked).
Send New File:
- Check this box to transmit the file to the ACH processor or send it to the I:drive.
- Typically, the file is then uploaded to the ACH processor if not handled directly by FLEX.
Send Report:
- Check this box to produce a report of all transmitted items.
- If building and sending simultaneously, this box can remain unchecked as reports will be identical.
Post Pending Originations:
- Check this box if pending originations should be posted when new origination files are built.
- If not selected, use the Post button on the main ACH Origination screen to post these items later.
- Transactions are typically posted one day after transmission.
Flexibility: Build, Send, and Post Pending Transactions can be run separately or together.

6. Viewing Pending ACH Origination Transactions

The Pending ACH Origination Transaction Inquiry option allows credit unions to view unposted ACH Origination transactions.

Access: Located under ACH/ACH Origination in the FLEX Main Menu.
Purpose: Inquiry-only screen.
Display: Lists all pending ACH Origination transactions that have been sent to the origination DFI and are awaiting posting to member accounts.
Sorting: Default view is by effective date. Click any column header to sort the listing.
Search: Click Search to query for specific pending items.

7. Viewing ACH Origination Records on Member Inquiry Screen

ACH Origination records can also be accessed directly from a member’s account:

Navigate to Transaction Entry/Inquiry: Access a member account on the Transaction Entry/Inquiry screen.
Select ACH Inquiry: From the Inquiry drop-down box, select ACH to display ACH information.
View Tabs: Three tabs are available to view ACH Information:
- ACH Information: General ACH details.
- Pending ACH: Pending ACH transactions.
- ACH Origination: Displays records set up by the member and the next processing date. This includes Member Generated records set up via Online Banking (if allowed by the credit union).