ACH Origination

ACH (Automated Clearing House) Origination is a service offered by First National Bank of Milaca that allows any business customer the ability to originate electronic transactions. Organizations that initiate these transactions are called "originators." Transactions can be either debits or credits. Examples of debit transactions include utility payments, account drafts, membership fees, dues, insurance premiums, etc. Credit transactions are usually for the Direct Deposit of Payroll.

Any company whose financial institution has the capability to originate ACH transactions can become an originator. 

ACH was formed in 1978 to provide a nationwide network for distributing electronic transactions. All financial institutions are required to accept ACH. According to the NACHA website (www.nacha.org), "the ACH network serves 20,000 financial institutions, 3.5 million businesses, and 135 million individuals. In 2002, there were almost 9 billion ACH payments made worth more than $24.4 trillion."

Participation in ACH Origination may reduce the costs associated with manually processing debits and credits. The cost to create and distribute payroll checks ranges from $.50 to $2.00 per check. If you consider the hassle of employees trying to get a deposit in on time, second or third-shift employees, and absent or sick employees, manual payroll distribution can negatively impact your organization. The cost of Direct Deposit of Payroll using ACH Origination is only a fraction of the cost of manual processing. Similarly, the cost of manually creating invoices, mailing them to customers, providing a return envelope, waiting for checks to be mailed, and creating deposits averages $1.00 to $3.00 nationally. Direct Debit using ACH Origination is the most cost-effective way of processing any type of receivable that is currently handled manually.

First National Bank of Milaca will be glad to assist you in determining the savings relevant to your situation.

First National Bank of Milaca can help in communicating the benefits of ACH Origination. Employees/customers are not as cautious as they once were toward ACH transactions. Most individuals have at least one automatic transaction posting to their account and more consumers use the ACH system than ATMs. Employees/customers sign an authorization form allowing you to perform the transaction on their behalf. Employees/customers can cancel the ACH transaction simply by notifying your company.

No. They can have accounts at any financial institution in the United States.

ACH is built into our online banking platform. It allows you to manually input payee information, or to upload a NACHA file from an accounting software your business uses. The online system enables you to select the date on which the transactions will be received/paid and to/from what account.

The offset of the transactions you originate will be posted to any Demand or Savings account held at First National Bank of Milaca. For example, if you originate $5,000 in Direct Deposit credits, your account will be debited for $5,000. If you originate $5,000 in debit transactions, your account will be credited for $5,000.

ACH Origination can improve cash flow dramatically. For example, suppose you are sending invoices on a monthly basis. You mail invoices 4 times per month; however, your customers send in payments whenever they get around to it. This means incoming cash is delayed. With ACH Origination, you would create 4 transaction files and send them to First National Bank of Milaca. On the date the transactions are to post (the effective date), your account would be credited with the entire amount of the transactions. No more waiting for your customers to remember to mail you a check!

ACH transactions can be returned in the same manner as checks. Incoming ACH returns will be communicated to you on a daily basis, as they happen. You can either reinitiate the transaction or handle it as you would a returned check.

Contact First National Bank of Milaca. We will assist you in completing the ACH application, determining your method of transaction generation, and getting an Originator Agreement signed.