Do any of you use standing ACH Authorizations to help secure your bank accounts? Do you find it problematic or beneficial overall? One of the steps to getting this set up is to provide a list of trading partners and thresholds (if wanted). I am reviewing our historical detail and some of the trading partners are easy to id (payroll service provider for example). However I am wondering if ad hoc payments we want to go through (
ACH Authorizations
Answers
Ken,
What do you mean by "secure your bank accounts"? Not sure what you want to achieve here.
Wayne
2
Wayne - There is functionality where you can tell the bank precisely who you want to enable ACH debits on your account for and/or block specific transactions. Anyone not listed would be routed for approval.
It is "positive pay" for ACH's. Most are familiar with it on the check side.
Ken - Very familiar with "positive pay". Most allow a range of acceptable payments from pre-approved vendors, but I would want to make sure tax payments are correct and authorized.
In fact, IMHO, unless they are serial payments (rent, leases, etc), I still want to release the ACH, not permit them to pull the ACH.
Ken,
My company uses ACH Positive Pay and I am very happy with it. I only included the vendors where I have to initiate the payment online, mostly state tax payments. Any other direct debits have to be manually approved. This worked very well for us, as one of our vendors automatically renewed our contract annually and deducted the amount out of our account. We never received any kind of notification until the money was deducted. By entering a limit and an expiration for that vendor, we were able to prevent them from deducting the payment from our account, thereby allowing us to choose to renew or not. Just like positive pay, you only have a short window in which to approve the payment so if you forget to check or you're out of the office, a payment may not go through, depending on your default decision. I receive an email from my bank when there is an ACH Positive Pay item and that helps a lot.
Ken,
I believe what you are referring to is the ACH Debit Block service, which basically means that an outside entity cannot reach into your bank account and take cash out. In order for an outside entity to do that, you would have to specifically tell your bank that said entity is allowed up to a limit that you pick. Usually this is done by filling out a form and sending it to your bank. In terms of is it problematic or beneficial that is up to how you use it. It does provide an additional layer of security, on the other hand even an approved vendor can have its request bounced back in case they try to debit your account for more than the limit you have set up. In that regard, it doesn't quite work like check positive pay which you get a chance to review and make a decision.
As an update on my end, it appears our setup will give us the ability to approve transactions outside of pre-configuration and to add / remove / edit the list. I like this level of control and plan to use. If it is more headache than it is worth, I'll let the community know.
Julie - your example was spot on and very helpful (have that scenario with a vendor myself).
Thanks all.
Filed Under:
Cash Management