ACH Transactions: A Guide for Workforce Payroll Users
As a customer of the Workforce Payroll module, understanding the intricacies of Automated Clearing House (ACH) transactions is paramount. Two critical processes within ACH transactions are the Notice of Change (NOC) and Return. Here's a an overview from Workforce Payroll's perspective to navigate these processes effectively.
In the world of ACH and Payroll processing, there are two common concepts that payroll administrators should be aware of: Notices of Change and Returns.
Notice of Change (NOC):
The NOC serves as a proactive mechanism to inform the Originator (you, the customer) about necessary modifications required in a previously submitted ACH entry.
Common Scenarios:
Alteration in an account number.
Adjustment in a routing number.
Correction of an erroneous name.
Return Entry (ACH Return):
A return is initiated by the Receiving Depository Financial Institution (RDFI) - (the employee’s bank) when it is unable to process an ACH entry due to various reasons, and the entry is returned to the Originator (you).
Common Scenarios:
Insufficient funds.
Account closure.
Unauthorized transaction.
Key Differences:
An NOC is initiated by the employee’s bank (RDFI) to communicate necessary changes to the Originator (customer).
A Return is initiated by the employee’s bank (RDFI) to send the entry back to the Originator (customer).
Information Modification:
When an NOC is provided back to Workforce Payroll from the receiving institution, we will notify the customer administrator and it will be up to the customer admin or employee to correct and or update information to the employee bank details record in Workforce. Ideally this would be completed before the next ACH entry within the Workforce Payroll. Although some institutions may continue to allow the ACH to process, it is best practice to correct the record as soon as possible to avoid pay interruption.
A “Return” signifies the actual rejection of the entire transaction due to an issue preventing processing. In such cases, Workforce Payroll will reach out to the customer admin to gather the proper information so that a return | payment transaction can be made for payment.
Timing:
NOC is typically communicated before the next scheduled payment to ensure accurate information for future transactions.
Return can occur post the attempted transaction when it cannot be processed. Often, the employer will already be made aware of the issue from the impacted employee due to the employee reporting non-payment to their account. “I didn’t get paid”
Understanding the dynamics of NOC and Return processes is vital for seamless ACH transactions within Workforce Payroll . As a user of our software, leveraging this knowledge empowers you to navigate ACH transactions efficiently, mitigating potential issues and ensuring smooth payroll processing operations.
Should you require further clarification or assistance on ACH transactions within Workforce Payroll, our dedicated support team is readily available to provide guidance and support.