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NACHA’s same-day settlement launches Sept. 23

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in Office Management,Payroll Management

Beginning Sept. 23, 2016, rule changes at NACHA—the electronic banking organization—will allow same-day settlements of payroll items. Upshot: You’ll be able to pay terminating employees electronically and you’ll be able to respond to emergencies, make off-cycle payments (e.g., reimbursements) and correct errors in employees’ pay and tax deposits. Exception: Transactions exceeding $25,000 aren’t eligible for same-day settlement.

ACH LINGO: Your bank is the originating institution; employees’ banks are the receiving institutions. ACH transactions, like direct deposit, are settled.

There are two new settlement windows. The morning submission deadline is 10:30 a.m., with settlement at 1 p.m. The afternoon submission deadline is 3 p.m., with settlement at 5 p.m.

There is one catch with same-day settlement: Originating banks’ participation is voluntary. If you’re interested, talk to your bank to determine whether same-day settlement is appropriate and cost effective.

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