Cash Management

Every year the National Automated Clearinghouse Association (Nacha) publishes new rules that expand upon ACH services and/or requirements related to ACH entries. As your business partner, FOCUS Bank wants to ensure your continued compliance with Nacha’s Operating Rules and Originator Responsibilities that cover the transactions you make when you originate electronic payments through the Automated Clearing House (ACH) Network.

The Nacha Rules updates, processing deadlines, and retention periods are available on Nacha’s website at www.nacha.org.

Links are available on their website for the specific information you need.

Federal holiday schedules are published and available on the following web site: https://www.frbservices.org/about/holidayschedules/. By navigating to the URL, you will find the holiday schedule for the Federal Reserve Bank through 2029. Keep in mind that a payment cannot have an effective date on a Federal holiday because the Federal Reserve is not open for processing. Therefore, it is important you take note of the holiday schedule to make sure the transactions you initiate process on time.

Upcoming Rule Updates

The following rule changes take effect March 20, 2026, however, may be adopted earlier:

Company Entry Description – Payroll: Establish a new standard description of “PAYROLL” for PPD Credits for payment of wages, salaries, and other similar types of compensation. New Language indicates “The use of the term PAYROLL” in this field is descriptive and by use of the word, neither the Originator, nor the ODFI (or any Third-Party Service Provider acting on behalf of an Originator or ODFIO), makes any representation or warranty to the RDFI or the Receiver regarding the Receiver’s employment status.

What Is Changing?

Starting March 20, 2026, ACH Transactions used to pay wages, salaries, or other similar types of compensation must include “PAYROLL” in the Company Entry Description field.  This applies regardless of the worker’s status (covering both W-2 employees and 1099 contract employees.  Additionally, pre-tax deductions such as contributions to a Health Savings Account (HAS) are also required to use the “PAYROLL” descriptor. 

Examples that generally should be treated as payroll include:

• Regular salary or hourly wages
• Overtime pay
• Bonuses and commissions
• Other direct compensation for work performed
• Certain payroll-related benefits

If you are paying a contractor for services they provided (e.g., consulting, design, or freelance work) via ACH, that payment may be considered payroll under this rule. 

Note: the IRS and Nacha have different definitions for what is considered payroll payments.

Generally, reimbursement (e.g., expense reports, travel reimbursements, out-of-pocket purchases you’re paying back) should not be marked as payroll. 

Share This Information with Your Team

If payroll is managed by someone else within your organization, such as a payroll processor, accountant, or third-party provider, be sure to share this information so any necessary updates can be made before the March 20 deadline.

Why This Matters for ACH Originators?

Businesses that originate ACH transactions are responsible for ensuring those transactions are accurate, authorized, and compliant with Nacha rules.  Staying informed about rule changes like this one can help reduce the risk of payment disruptions, avoid delays in employee payroll, and support overall ACH compliance. 

Annual Training

FOCUS Bank conducts annual ACH originator training in which new rules and compliance are reviewed along with additional topics to provide originators with the needed information and tools to remain compliant and in good standing with The bank.  Originators will be notified of the training date each year. 

Fraud Mitigation

How to prevent fraudulent originated transactions.

It is a role that you and your company play in maintaining the proper security over Protected Information obtained as an ACH payment originator. In the context of payment originations, Protected Information may be referred to as non-public information and is defined as the non-public personal information, including financial information of a natural person used to create an entry, or contained within an entry, and any related addenda record.

Originators must be vigilant in their effort to protect the security of Protected Information due to the increased focus on privacy of data, threats from data breaches, and other unscrupulous activity, such as:

• Corporate account takeovers

• Viruses

May 2025 ACH Rules Update

• Network intrusions

• Employee/email fraud

• Hacking

Your company is required to establish, implement, and update policies, procedures, and systems (including controls) with respect to the initiation, processing, and storage of Protected Information that are designed to:

(a) Protect the confidentiality and integrity of Protected Information until its destruction

(b) Protect against anticipated threats or hazards to the security or integrity of Protected Information until its destruction

(c) Protect against unauthorized use of Protected Information that could result in substantial harm to a natural person.

Furthermore, it is a requirement of FOCUS Bank that all Protected Information is to be protected by its ACH originators/third parties. Your company is responsible for following up with any ACH Receiver email request to change their account information with a phone call to a phone number per your records on file, not included in the email request or an in person validation.

Reminders of Your Responsibilities as an ACH Originator

ACH Originators must obtain proper authorizations, dependent on the transaction type, and retain authorizations for two years past revocation or after the last transaction. The Bank can ask you for a sample or specific authorization at any time and you are obligated to provide to prove authorization. If you originate debits to accounts this is very important:

An ACH authorization form must include specific information to comply with NACHA Operating Rules and ensure proper processing of payments. Here are the key elements required:

• Personal information: Full name, address, phone number.
• Bank account details: Account number, routing number, account type (checking or savings)
• Payment information: Payment amount (or maximum amount for variable payments), payment frequency (one-time or recurring), and start date of authorization.
• Payment Collection date: start date and frequency (must be signed before start date)
• Payee details: Name of the company or individual being paid.
• Authorization statement: A clear statement such as “I authorize Company to debit my account”.

• Signature: signature of someone on that account (or electronic equivalent for online forms).
• Cancellation parameters: Instructions for canceling recurring payments or payments scheduled in advance.

*A sample Debit Authorization form can be provided to you by FOCUS Bank at time of ACH approval or upon request.

• Protect the banking information received in the authorizations.
• Cease subsequent entries when authorization has been revoked.
• If requested by the Bank, the Company shall immediately provide a copy of authorizations. The Bank may request to see your authorizations from time to time.
• Send entries on the proper date and/or schedule.
• Make necessary changes to payee account information within six (6) banking days upon recipe of a Notice of Correction or before another entry is sent.

Be aware that our only Routing/ABA Number is 081517732. If initiating a transaction to another FOCUS Bank customer, this Router should be used or your transaction may be returned.

Need Help?

FOCUS Bank’s Business Development team is available to answer questions to assist with understanding how this change applies to your account. 

Phone: 1-800-464-3150

Hours: Monday through Friday, 8:00 AM – 5:00 PM

Email:  [email protected]

• Conduct a number of ACH debits and credits 24/7, electronically: 
  • Directly deposit employee payroll 
  • Make vendor payments 
  • Pay state and federal taxes 
• An up-to-date record of transactions is available via online banking or account statements 
• Schedule one-time or recurring ACH debits & credits  
• Improve cash flow 
• Increase productivity by automating processes 
• Cut down on employee resources and time  
• Increase accuracy; reduces human error 
• Eliminates wastes and expenses associated with paper checks DETAILS 3 Details NameDetails ContentParagraphTo open the popup, press Shift+EnterTo open the popup, press Shift+Enter Delete
• Create Same Day ACH debits and credits
• Learn more about Same Day ACH Options*
• ACH Origination Services Training Guide

To learn more, contact the Business Development team for additional information.  Fees may apply.  

• Deposit checks from the convenience of your office 
• Utilizes a desk scanner and internet access 
• Simply sign, scan, then send checks to the bank for processing 
• Checks converted to an electronic image that is then securely transmitted to the bank 
• Streamline check handling from multiple offices or locations 
• Same day credit up to 4:00 CST pm; realize funds quicker, accelerating cash flow  DETAILS 4 Details NameDetails ContentParagraphTo open the popup, press Shift+EnterTo open the popup, press Shift+Enter Delete
• Saves time; the whole process can be done in a matter of minutes 
• Reduce time and money spent on document preparation and transportation 
• Fewer errors in accounting 
• Reduce the risk of check fraud by eliminating the circulation of paper checks

To learn more, contact the Business Development team for additional information.  Fees may apply.

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