Business Banking Products and Services

Automated Clearing House


ACH origination allows any business customer to create electronic payments and deposits. Businesses that create these transactions are called Originators. Transactions can either be debits or credits. Examples of debit transactions include utility payments, account drafts, membership fees, dues, insurance premiums, etc. If you are a business that wants to debit customer accounts for a credit to your account, you would be originating debit transactions. Credit transactions are usually for Direct Deposit of payroll or for you as a business paying some other individual or entity.

Who can participate?

Any company can participate. As a bank, we have systems in place that allow us to act as the Originating Depository Financial Institution (ODFI) on behalf of you, the Originator.

How is transaction information generated?

Due to the popularity of ACH transactions, most payroll and billing software programs already have ACH file creation as a standard feature. There is an ACH file format that is standard throughout the United States, and your existing software might already have the capability to create this type of file. If you do not have the capability to create an ACH file, there are several companies that can provide ACH file creation software to you. These software systems allow you to enter transaction information, such as dates, amounts, financial institution routing numbers, account numbers, and information relating to the term and frequency. Transaction files are generated from the software and are formatted in a way that allows us to process them electronically. This format is usually referred to as NACHA-formatted.

Where do I get software to produce an ACH file?

Most payroll systems are set up to accommodate these transactions. If yours does not, or if you are not sure, contact your payroll software provider, your accounting system software provider, or your CPA for their recommendations. You can always, of course, contact us to discuss this as well.

How will payments be settled to my account?

Offset amounts equal to the transactions you originate will be posted to any Demand Deposit or Savings account held at our institution. 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.

What about returned items?

ACH transactions are similar to checks in that they be returned. Typically, though, ACH transactions are returned at a lower rate than paper checks. Incoming ACH returns will be communicated to you on a daily basis, as they happen. You can either re-initiate the transaction or handle it as you would a returned check.

What rules, policies, or procedures are needed if a company participates?

As a participant in the ACH payments system as an Originator, companies are required to follow the rules as set forth for Originators in the ACH Operating Rules book. To ensure compliance, companies need to purchase the book (available through the NACHA website at

Most of the rules are outlined in the agreements companies sign with us as the Originating Depository Financial Institution. The Rules book, however, spells out in detail all that will be required of an Originator, so it is important that companies understand the nuances of the program. The Rules book and the ODFI contract will outline things such as:

  • Transmission deadlines
  • Acceptable methods of transmission
  • File total limits
  • File total confirmations
  • Return item processing
  • Pre-notification Entries
  • Notifications of Change

Once you make a request to start ACH Origination, there is an evaluation process that takes place. We will evaluate your business relationship, how long you have been a customer, the type of business you operate, what types of ACH you are requesting to originate, etc. Once approved, the contract will be drawn up and signed, and you can begin.

Should my business become an ACH Originator?

Once you evaluate all the parameters as they pertain to your business, you can make that determination. There are some steps involved in setting up an ACH origination program. We’d be glad to assist you. Considerable savings can be realized through reduced postage, decreases in paper checks, etc.