Business Banking
ACH Prefunding Webcast
April DeLac
Intuit Financial Services University
Published December 2011
Objectives
Main Objective: Support businesses using the ACH Prefunding
feature in Business Banking.
By the end of this training, you will be able to:
•
Describe to a customer the purpose and basics of prefunding
an ACH file
•
Set up your ACH Prefunding service in the FI Admin Platform
•
Set up a customer with ACH Prefunding
•
Walk a customer through the ACH Prefunding steps
•
Process ACH prefunding batches
Note: Knowledge of the ACH module in Business Banking is a prerequisite for this training.
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Prefunding Basics
ACH Prefunding - The Basics
What is it?
• ACH Prefunding is a risk monitoring service that allows financial institutions to reduce liability
for selected at-risk ACH companies. This is accomplished by verifying and/or securing
customer funds for credit batches prior to processing. Though not all prefunding services work
the same, their objective is always identical – reduce risk.
How does it work?
• Selecting at-risk companies for ACH Prefunding enables your financial institution to separate
prefunding required credit batches from standard ACH credit batches. ACH Prefunding uses
the existing Business Banking ACH system with the addition of two new screens that allow an
FI Administrator to make processing decisions based on the customer’s funds availability.
Who’s using ACH Prefunding?
• Financial institutions wanting to mitigate ACH risk and loss and yet maintain their ability to
provide ACH services to a variety of companies.
How do I get it?
• To take advantage of this functionality, your financial institution must contract for ACH
Prefunding and complete implementation.
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ACH Prefunding - Decisions
Determining Method for Securing Funds
Your financial institution must determine how it will secure funds for prefunding
required companies.
Here are two suggestions:
1. Manually debit the business user’s account and credit an FI funding account
on your host system, or
2. Place a hold on the business user’s account on your host system to
guarantee funds availability at the time of processing.
Defining how your financial institution will secure funds helps determine whether to use
an FI account or the customer’s account to offset the prefunding credit batches.
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Prefunding Set Up
Maintenance – Policies
Once prefunding is implemented, the ACH section of Policies is modified to include an
“ACH Prefunding Cutoff Lead Time”.
• The ACH Prefunding Cutoff Lead Time is an earlier cutoff time than the main ACH
Cutoff Time—this impacts all ACH Prefunding batches. For example, if the ACH
Cutoff Time is 2:00 pm and the ACH Prefunding Cutoff Lead Time is set to 30
minutes, the ACH Prefunding Cutoff Time will be 1:30 pm.
• The dropdown will contain the following selections in ascending order:
[None], 30 mins, 60 mins, 90 mins, 120 mins, 150 mins, 180 mins.
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Maintenance – Policies
If your financial institution will transfer funds from the customer's account to an FI
Funding Account, you must set up your FI Funding Account.
Click the FI Prefunding Account Setup link to enter the FI Funding Account information.
This will be used as the offset account for companies’ credit batches when approved
from the new Pending Prefunding Batches screen (covered later).
Fields (all are mandatory):
Account Number: up to 17 alphameric characters
Account Name: up to 22 alphameric characters
Routing Number: prefills with your ACH ABA number, but can be edited.
Account Type: select Checking or General Ledger
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FI Administrator Profile Maintenance
To grant access to the proper administrators that will approve the prefunding batches,
your Super User must go to the FI Administrator Profile Maintenance screen and check
the Pending Prefunding Batches box.
This entitlement is separate
from “Process ACH Files”,
thus allowing your financial
institution to have someone
from your credit analysis or
loan department make the
decisions on your prefunding
batches.
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Workflow Email Routing
Enter up to 5 email
addresses into “ACH
Prefunding Pending
Submission” field. These
administrators get an email
notice when a prefunding
company submits an ACH
batch.
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Company Setup
Add New/Customer Maintenance
▪ In the ACH section, select the ACH Prefunding
box.
• Unbalanced files are required for ACH Prefunding.
Therefore, when ACH Prefunding is selected, the
“Balanced and Unbalanced Batches Allowed” and
“Balanced Batches Required” radio buttons are
grayed out.
▪ When a company is enabled for ACH Prefunding,
Suppress ACH ID Validation box will be grayed
out.
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Enabling ACH Prefunding
ACH Prefunding functionality links the ACH ID to the business’s offset account.
Building an association between the ACH ID and the customer’s account
number is what gives your financial institution the flexibility to select either the
FI funding account or the customer’s funding account as the batch offset.
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Add New/Customer Maintenance
Complete the following steps to enable ACH Prefunding for a company:
1. On the Add New Customer or Customer Maintenance screen, select the account(s) to be enabled
for ACH activity, enable the main ACH service, and click Add or Update.
2. Select the checkbox for ACH Prefunding, click OK on the pop-up, and click Update.
Note: The pop-up message reminds you to click Update first and then set
up the ACH ID and account association.
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Add New/Customer Maintenance
3. Click the ACH ID button to complete the setup on the ACH ID Maintenance window, i.e. set up of
the ACH IDs/descriptions and link them to an account number. Then click Update.
4. Click Update on the Customer Update screen.
• Selection of an account number is required for an ACH Prefunding customer.
• For standard ACH customers the Account Number fields do not display.
• If the company needs to associate an ACH ID with more than one account, assign a prefix to that
ACH ID.
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Customer Platform
Batch Template Maintenance
The Batch Template Maintenance screen differs for ACH Prefunding customers:
• The Offset Account dropdown is hidden.
• The “Create Offset” checkbox is hidden.
• The ACH ID options in the dropdown display as “ACH ID – Description – Account
Number” (all defined in the FI Admin Platform).
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Initiate Batch
When an ACH Prefunding company initiates, uploads or approves an ACH batch:
• A pop-up prompts the business user to click OK if they have funded their account.
• A confirmation screen will tell the business user that the batch is “FI Pending”.
• Batches will move to the Pending Prefunding Batches screen in the FI Admin Platform.
• Remember: Prefunding batches may have an earlier cutoff time than regular batches.
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Batch Statuses
Basic workflow and resulting statuses:
1. Company initiates a new batch = Pending status
2. Company approves the batch = FI Pending status
3. The financial institution approves the prefunding batch = Approved status
4. The financial institution downloads the ACH file = Downloaded status
Two other possible statuses:
FI Pending Deleted - if a financial institution deletes a prefunding batch
FI Denied – if a financial institution denies a prefunding batch, it displays in the Denied ACH Activity
section with the deny message. FI Denied batches will be available on the Edit Batch screen for
edits and resubmission.
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Processing
Prefunding Batches
Processing Overview
Step 1
Step 2
Step 3
Step 4
• Both initiated and uploaded prefunding credit batches go to the new
“Pending Prefunding Batches” screen in the FI Admin Platform.
• Financial institution secures funds; this is a manual process involving
either: 1) moving funds from the business’s account to the FI Funding
Account on your host or 2) placing a hold on the consumer’s account.
• Financial institution reviews and approve a batch or batches, allowing it to
proceed to the File Download screen.
• When batch is approved, the FI Funding Account is automatically be
inserted as the batch offset.
ACH Prefunding requires customers to initiate or send unbalanced batches that are all credits or all
debits. Debit ACH batches will not go through the ACH Prefunding process; instead, the customer’s
account that’s linked to that ACH ID will be used as a credit offsetting account.
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Pending Prefunding Batches
Admins go to the Pending Prefunding Batches screen in the File Processing menu.
Credit Batches appear on this screen for your ACH Prefunding companies. Batches are
retained here indefinitely; batches must be processed via action of Approve, Delete, Deny
or on the Override screen before they are removed from this page.
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Approve a Pending Prefunding Batch
Steps to approve a prefunding batch:
1.
2.
3.
4.
5.
Access the Pending Prefunding Batches screen.
Select the batch(es).
Click Approve.
On the host, initiate a book transfer from the
customer’s account to the FI funding account.
Process the batch at the appropriate time under
ACH File Processing.
Consequent actions:
• Approve updates batch status to Approved in the Customer Platform.
• Approve inserts the FI funding account as the offset account.
• Approve moves the batch to ACH File Processing.
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Other Pending Prefunding Batch Options
Override
Other
Actions
Deny
Delete
• clicking this button displays
the ACH Prefunding
Override screen (more on
next page).
• The financial institution enters a Deny Message
(required) first, then clicks Deny.
• Removes selected batch from Pending
Prefunding Batches screen.
• Updates batch status to FI Denied in the
Customer Platform with the deny message.
• Allows company to access the batch on the Edit
Batch screen.
• All Limits used for this batch are rolled back if
denied on the same day the batch was submitted.
• Deletes batch from pending section and follow the
rules of the current system deletes.
• Updates batch status to FI Deleted in the
Customer Platform.
• All Limits used for this batch are rolled back if
deleted on the same day the batch was submitted.
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Override Pending Prefunding Batch
Select a batch or batches and click the Override button to arrive at the new ACH
Prefunding Override screen. Use this screen to make additional processing decisions by
selecting which funding account will be used as the batch offset.
Approve
1. Creates offsetting transaction (based on selection) and inserts this in the batch.
2. Updates batch status to Approved in the Customer Platform.
3. Moves batch to ACH File Processing.
Show Pending – Displays the Pending Prefunding Batches screen. All batches that were not
submitted on the Override screen are retained on the Pending screen.
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Wrap Up
Notes for your Financial Institution
 If using an FI Funding Account as the batch offset, it is recommended that you create a test batch to





insure the account allows posting of ACH transactions.
The FI Funding Account information must be entered and stored on the FI Admin Policies section of
the FI Admin platform.
If using the ACH Prefunding Lead Cutoff Time feature, it is recommended that you update your
messages on the Initiate, Send and Edit screens to point out the two different cutoff times (one for
Prefunding and one for standard).
Ensure all ACH Prefunding companies have a customer funding account number assigned to each
ACH ID.
Decide if you will change the effective date control for your prefunding customers.
Perform necessary maintenance on existing ACH IDs if you are currently using the Business Banking
ACH module. Businesses may use more than one offset account with the same ACH ID; the same
ACH ID number to be defined multiple times, but each occurrence must have a unique prefix (FI
defined). This will allow customers to use a payroll account for payroll batches and an operating
account for other ACH activity, while still using the same ACH ID.
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Notes for your Business Clients
 Uploaded or Initiated individual batches must be unbalanced, containing only Debit transaction or
only Credit transactions. Batches that include both credit and debit transactions will fail.
 Do not upload mixed batches via Send ACH File, i.e. do not combine debit-only and credit-only
batches in a single upload.
 Existing ACH enabled companies must be given notification and instructions to unbalance all
previously created balanced Batch Templates. Uncheck the “Create offsetting transaction” box to
unbalance the template (in order to initiate those template after prefunding has been required).
 The ACH ID will be used to determine which account is used for prefunding.
Business Banking ACH Prefunding webcast
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Questions?
Pause the webcast to jot down your question(s), then email
them within 2 business days after the webcast to
ifsuniversity@intuit.com.
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