The complete list of ACH rejection codes: Why they happen and how to handle them


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  1. Introduction
  2. What are ACH transfers?
    1. Characteristics of ACH transfers
    2. Importance for businesses
    3. Limitations
  3. What are ACH rejection codes?
  4. Why ACH rejections happen
    1. Administrative errors
    2. Authorisation issues
    3. Financial issues
    4. Timing and processing constraints
    5. Risk management and regulatory compliance
  5. ACH rejection codes list
  6. How businesses should handle ACH rejections
    1. Preventive measures
    2. Handling rejections
    3. Actions for specific scenarios

Automated Clearing House (ACH) transfers are a common way for businesses and people to send or receive money electronically. In 2022, 30 billion ACH transfers occurred with a value of over US$76 trillion. Despite how convenient, cost effective and popular this payment method is, it's still fairly common for ACH transfers to be rejected.

When an ACH transfer cannot be processed, the ACH network returns a 'rejection code' or 'return code' that explains why a transfer wasn't completed. The reason could be as simple as a wrong account number or as complicated as rules and restrictions that financial institutions place on these types of transactions.

When ACH rejections happen, it's important for businesses to know what went wrong to prevent future issues and maintain customer trust and satisfaction. Below we'll explain the different types of rejection codes, what causes rejections, how to prevent them and how to handle them when they occur.

What's in this article?

  • What are ACH transfers?
  • What are ACH rejection codes?
  • Why ACH rejections happen
  • ACH rejection codes list
  • How businesses should handle ACH rejections

What are ACH transfers?

Automated Clearing House (ACH) transfers are a form of electronic money transfer that moves funds between different financial institutions. These transactions are usually processed in bulk and are governed by the rules set forth by Nacha (originally the National Automated Clearing House Association) in the United States.

ACH transfers are a reliable, cost-effective and versatile payment method that US businesses have broadly embraced. Although they have certain limitations, the benefits often outweigh the drawbacks, especially for operational efficiency and cost management. Here are the key points to know about ACH transfers.

Characteristics of ACH transfers

  • Cost-effectiveness: ACH transfers cost less than wire transfers and credit card transactions. Businesses aiming to reduce operational expenses often choose ACH transfers for this reason.

  • Versatility: These transfers can be used for various purposes, such as direct deposit of payroll, recurring payments such as subscriptions and vendor payments.

  • Batch processing: Unlike real-time transactions, ACH transfers are usually processed in batches. This often results in a slower settlement time, typically taking up to three business days.

  • Types: ACH transfers can be divided into ACH debit and ACH credit payments. ACH debits allow a business to withdraw money from another account, often with prior authorisation. ACH credit payments let a business deposit money into an account, and businesses commonly use them for payroll and vendor payments.

Importance for businesses

  • They're a highly efficient payment method
    The batch processing of ACH transfers helps businesses plan their financial activities more effectively, knowing what time transactions will settle.

  • They're compliant with payment regulations
    Compliance with Nacha regulations guarantees a uniform, secure experience that minimises risks of fraud or disputes.

  • They increase accuracy of financial forecasting
    ACH transfers improve cash management because of their predictability and low cost. Businesses can forecast their finances with greater accuracy, optimising available resources.

  • They're compatible with a flexible payment strategy
    Accepting ACH payments can make a business more appealing to customers who prefer not to use credit cards, providing an alternative that's beneficial to both parties.


  • Slower processing times
    One drawback of ACH transfers is that they settle more slowly – it takes up to a few days – which could be an issue for businesses that require quick access to funds.

  • Insufficient funds risk
    ACH debits might not clear if the payer's account lacks sufficient funds, leading to delayed payments and potential fees.

  • Error resolution can be complex
    Since ACH transfers are automated and batch-processed, resolving errors can be more time-consuming and complicated than with other forms of payment.

What are ACH rejection codes?

ACH rejection codes are alphanumeric messages that signal why an ACH transaction failed to process. These codes describe what went wrong with a particular ACH transfer, allowing businesses and financial institutions to take corrective action.

Why ACH rejections happen

ACH rejections can occur for a variety of reasons that generally fall under one of five categories: administrative errors; authorisation issues; financial inadequacies; timing and processing constraints; or risk management and regulatory compliance. Each category has its own set of challenges and requires specific solutions. Here are more details on why ACH rejections happen.

Administrative errors

  • Incorrect account information: One of the most common reasons for ACH rejections is incorrect account numbers or routing numbers. If either is wrong, the transaction will not go through.

  • Closed or non-existent accounts: If an account has been closed or never existed, the ACH transaction will be rejected with specific codes such as R02 or R03.

  • Account type mismatch: Some ACH transactions require a specific type of account, such as a business account or a savings account. If there's a mismatch, the transfer will not go through.

Authorisation issues

  • Lack of preauthorisation: For an ACH debit to take place, the account holder usually needs to provide prior authorisation. If such authorisation is missing, the transaction will be rejected.

  • Revoked authorisation: Sometimes a customer or a business partner may revoke a previously granted authorisation for debits. In such cases, any subsequent ACH transactions will be rejected.

  • Corporate authorisation disputes: In the context of corporate transactions, if a corporate entity advises that an ACH debit or credit is not authorised, the transaction will be flagged and rejected.

Financial issues

  • Insufficient funds: One of the more straightforward reasons for an ACH rejection is a lack of funds in the account that's being debited. This will trigger an R01 code.

  • Uncollected funds: Funds may be present in an account but are not yet cleared or collected, leading to an R09 rejection code.

  • Stop payment orders: Account holders have the right to issue a stop payment order against specific transactions. When such an order exists, any corresponding ACH debit will be rejected.

Timing and processing constraints

  • Stale or expired entries: In some cases, ACH transactions have a limited period of time during which they can be processed. If submitted too late, they may be rejected.

  • Exceeding transaction limits: Both individual accounts and businesses may have different limits on the amounts they can transfer. Nacha increased its same-day ACH payment cap to US$1 million per payment in 2022. Exceeding these limits will cause the transaction to be rejected.

  • Origination issues: Sometimes the problem might not be with the receiving account but the Originating Depository Financial Institution (ODFI). If they request a return of an entry for some reason, the transaction will not be completed.

Risk management and regulatory compliance

  • Suspected fraud: Financial institutions continuously monitor for suspicious activities. An ACH transaction that is flagged as potentially fraudulent will be rejected to safeguard against unauthorised transactions.

  • Non-compliance with regulations: Non-compliance with Nacha guidelines or other regulatory standards can also result in rejections. This might include failures in end-to-end encryption or not adhering to two-factor authentication protocols.

Understanding these reasons can help businesses and financial institutions fine-tune their ACH transaction processes, improve troubleshooting, resolve problems more quickly and generally keep things running smoothly.

ACH rejection codes list

ACH rejection and return codes are inevitable when you accept bank transfers as a payment method. Before we discuss the specific codes, let's describe a few key terms to understand:

  • Entry: Any ACH transaction submission
  • Return: When an entry has been sent back to the ODFI after it was accepted for processing
  • Rejection: When an entry was never accepted into the ACH network for processing in the first place
  • ODFI: Originating Depository Financial Institution that sends ACH transactions
  • RDFI: Receiving Depository Financial Institution that receives ACH transactions

Here's a list of all the ACH rejection codes, what they mean, what causes them and what actions they require you to take:

R01 – Insufficient funds

  • Description: There are not enough funds in the account to cover the transaction.
  • Prevention: Monitor account balances regularly and set up low balance alerts.
  • Action: Reach out to the account holder to address the issue and submit the transaction once funds are available.

R02 – Account closed

  • Description: The account holder has closed the account being accessed.
  • Prevention: Confirm account status before initiating transactions.
  • Action: Obtain new account information from the account holder and update your records.

R03 – No account / unable to locate account

  • Description: The account number or routing information doesn't match any accounts at the RDFI.
  • Prevention: Verify account numbers before initiating transactions.
  • Action: Request correct account information from the recipient.

R04 – Invalid account number

  • Description: The account number provided with a transaction is incorrect because the number has incorrect digits, doesn't pass digital validation or doesn't match the account numbers at the RDFI.
  • Prevention: Validate account numbers against a predefined structure.
  • Action: Obtain the correct account number and resubmit.

R05 – Unauthorised debit to consumer account using corporate SEC code

  • Description: A corporate Standard Entry Class (SEC) code was incorrectly used for a consumer account.
  • Prevention: Ensure proper SEC codes are used for the type of transaction.
  • Action: Correct the SEC code and resubmit the transaction.

R06 – Returned per ODFI request

  • Description: The ODFI has returned the transaction, for various reasons.
  • Prevention: Confirm transaction details before submitting.
  • Action: Contact the ODFI to determine the issue and decide on the next steps.

R07 – Authorisation revoked by customer

  • Description: The customer has revoked the authorisation of the transaction.
  • Prevention: Keep updated authorisations and communicate with customers.
  • Action: Do not resubmit without a new authorisation.

R08 – Payment stopped

  • Description: The account holder has placed a stop payment order on this specific transaction. This code is the general order for most stopped payments, with the exception of stops on a source document or RCK entries ('Re-presented Check Entry', or bounced cheques), which have specific codes below.
  • Prevention: Confirm authorisation and payment details with the account holder.
  • Action: Contact the account holder to resolve the issue.

R09 – Uncollected funds

  • Description: The account may have deposits that have not yet cleared, resulting in insufficient funds for the transaction.
  • Prevention: Be aware of deposit clearing timelines.
  • Action: You may resubmit once the funds are collected.

R10 – Customer advises not authorised

  • Description: The customer has stated the transaction was not authorised.
  • Prevention: Secure proper authorisation before initiating the transaction.
  • Action: Do not resubmit without obtaining new authorisation.

R11 – Cheque truncation entry return

  • Description: A truncation (cheque-clearing) error has occurred for various reasons, based on bank policy.
  • Prevention: Confirm cheque details before truncating.
  • Action: Consult with the bank for specifics and reprocess as needed.

R12 – Account sold to another RDFI

  • Description: The customer changed banks and the account has been transferred to another RDFI.
  • Prevention: Update account information regularly.
  • Action: Obtain the new bank details from the customer and update your records.

R13 – Invalid ACH routing number

  • Description: The ACH routing number is incorrect.
  • Prevention: Verify routing numbers before initiating transactions.
  • Action: Update the routing number and resubmit.

R14 – Representative payee deceased or unable to continue in that capacity

  • Description: The representative payee is deceased or cannot perform duties.
  • Prevention: Keep track of representative payees and their status.
  • Action: Obtain a new representative payee and update records.

R15 – Beneficiary or account holder deceased

  • Description: The beneficiary or account holder is deceased.
  • Prevention: Regularly update account holder and beneficiary information.
  • Action: Cease transactions and consult with the estate or new account holder.

R16 – Account frozen

  • Description: The account is frozen, due to legal action or bank policy.
  • Prevention: Keep track of legal issues related to accounts.
  • Action: Contact the financial institution for details and resolution.

R17 – File record edit criteria

  • Description: Entries contain invalid formatting or data, which the RDFI may interpret as the transaction being initiated under questionable circumstances.
  • Prevention: Validate each field in the entry before submission.
  • Action: Correct the entry and resubmit.

R18 – Improper effective entry date

  • Description: Transaction was initiated with an incorrect effective entry date, which is the date on which the ODFI wants the transaction to occur.
  • Prevention: Verify effective entry dates before submission.
  • Action: Correct the date and resubmit.

R19 – Amount field error

  • Description: Amount entered in the Amount field is invalid.
  • Prevention: Validate amounts before submitting.
  • Action: Correct the amount and resubmit.

R20 – Non-transaction account

  • Description: Policies or regulations prevent ACH transactions on this account.
  • Prevention: Confirm account types before initiating transactions.
  • Action: Use an alternative payment method or account.

R21 – Invalid company identification

  • Description: Company ID information is incorrect or outdated, commonly caused by a miskeyed entry.
  • Prevention: Validate company IDs before initiating transactions.
  • Action: Update the company ID and resubmit.

R22 – Invalid individual ID number

  • Description: The individual ID entered – typically by a customer in the customer ID field – was invalid.
  • Prevention: Validate individual ID numbers before initiating transactions.
  • Action: Update the individual ID number and resubmit.

R23 – Credit entry refused by receiver

  • Description: The financial institution receiving the transaction (the RDFI) refused the credit entry, perhaps because of a dispute or lack of agreement.
  • Prevention: Confirm transaction terms with the RDFI.
  • Action: Resolve the issue with the RDFI and act accordingly.

R24 – Duplicate entry

  • Description: The same transaction was submitted more than once.
  • Prevention: Implement controls to prevent duplicate transactions.
  • Action: Confirm whether it's a true duplicate and take appropriate measures.

R25 – Addenda error

  • Description: The addenda record, which identifies the account holder or provides payment information to the RDFI, is incorrect or out of sequence.
  • Prevention: Validate addenda records before submission.
  • Action: Correct the addenda record and resubmit.

R26 – Mandatory field error

  • Description: A required field is missing information, due to incomplete data entry, leading the ACH operator to reject the transaction.
  • Prevention: Ensure all mandatory fields are populated.
  • Action: Populate the missing fields and resubmit.

R27 – Trace number error

  • Description: Trace numbers submitted are not consistent with the trace numbers in the addenda record.
  • Prevention: Validate trace numbers before submission.
  • Action: Correct the trace number and resubmit.

R28 – Routing number check digit error

  • Description: The check digit, which is the final digit in the routing number, is incorrect.
  • Prevention: Validate routing numbers and their check digits.
  • Action: Correct the check digit and resubmit.

R29 – Corporate customer advises not authorised

  • Description: The corporate account holder has notified the RDFI that the transaction is not authorised.
  • Prevention: Secure proper authorisation before initiating the transaction.
  • Action: Do not resubmit without obtaining new authorisation.

R30 – RDFI not a participant in cheque truncation programme

  • Description: The RDFI does not participate in the cheque truncation programme.
  • Prevention: Confirm capabilities with the RDFI.
  • Action: Use another form of payment.

R31 – Permissible return entry

  • Description: The RDFI has asked the ODFI if it can return the corporate credit or debit card or Corporate Trade Exchange (CTX) payment format, and the ODFI has agreed.
  • Prevention: Not applicable, as it's based on mutual agreement.
  • Action: Follow the guidelines set out by the agreement between the ODFI and RDFI.

R32 – RDFI non-settlement

  • Description: The RDFI is not able to settle the entry, for various reasons.
  • Prevention: Confirm settlement capabilities with the RDFI.
  • Action: Consult the RDFI for the specific reason and take appropriate action.

R33 – Return of XCK entry

  • Description: The RDFI has returned the entry for a lost, destroyed or damaged cheque (XCK entry).
  • Prevention: Familiarise yourself with the return conditions for lost or damaged cheques.
  • Action: Assess why the cheque can't be processed and take the next steps accordingly.

R34 – Limited participation DFI

  • Description: A federal or state regulator has limited the RDFI's ability to process ACH transactions.
  • Prevention: Confirm RDFI capabilities beforehand.
  • Action: Consult the RDFI for how to proceed.

R35 – Return of improper debit entry

  • Description: A debit entry has been improperly submitted, as they aren't permitted in some scenarios.
  • Prevention: Understand proper debit entry criteria.
  • Action: Assess the reason and make corrections before resubmission.

R36 – Return of improper credit entry

  • Description: A credit entry has been improperly submitted, as they aren't permitted in some scenarios.
  • Prevention: Understand proper credit entry criteria.
  • Action: Assess the reason and make corrections before resubmission.

R37 – Source document presented for payment

  • Description: A duplicate payment was attempted by presenting the source document related to an existing ACH transaction for payment.
  • Prevention: Track source documents and related ACH entries.
  • Action: Assess and rectify the duplication.

R38 – Stop payment on source document

  • Description: The receiving account holder requests to stop payment on a cheque that's been converted into an electronic payment.
  • Prevention: Monitor for stop payment orders.
  • Action: Cease processing and consult the account holder.

R39 – Improper source document

  • Description: The source document related to the ACH payment is incorrect or inadequate.
  • Prevention: Validate source documents before creating entries.
  • Action: Replace or correct the source document.

R40 – Return of ENR entry by federal government agency

  • Description: A federal government agency has returned an automated enrolment entry (ENR entry).
  • Prevention: Comply with ENR entry rules.
  • Action: Consult the agency for the specific reason and take appropriate action.

R41 – Invalid transaction code

  • Description: Transaction code is incorrect, specifically relating to the enrolment of direct deposit or direct payment services with a federal agency.
  • Prevention: Validate transaction codes before submission.
  • Action: Correct the transaction code and resubmit.

R42 – Routing number / check digit error

  • Description: The check digit at the end of the routing number is incorrect in a federal government ENR entry.
  • Prevention: Validate routing numbers and their check digits.
  • Action: Correct the check digit and resubmit.

R43 – Invalid DFI account number

  • Description: RDFI account number is incorrect. This return code only occurs in ENR entries, making it exclusive to federal government agencies.
  • Prevention: Validate account numbers before initiating transactions.
  • Action: Correct the account number and resubmit.

R44 – Invalid individual ID number

  • Description: Individual identification number provided doesn't match the ID number on record, specifically for federal government transactions.
  • Prevention: Validate individual ID numbers before initiating transactions.
  • Action: Update the individual ID number and resubmit.

R45 – Invalid individual name

  • Description: Account holder's name is incorrect or misspelt.
  • Prevention: Validate names before initiating transactions.
  • Action: Update the name and resubmit.

R46 – Invalid representative payee indicator

  • Description: Representative payee indicator code is incorrect.
  • Prevention: Validate indicator codes before initiating transactions.
  • Action: Correct the indicator code and resubmit.

R47 – Duplicate enrolment

  • Description: RDFIs send ENRs to federal government agencies to initiate ACH payments or direct deposits with these institutions. In this case, the same ENR has been submitted more than once.
  • Prevention: Implement controls to prevent duplicate enrolments.
  • Action: Confirm whether it's a true duplicate and take appropriate measures.

R50 – State law affecting RCK acceptance

  • Description: The RDFI is either in a state that doesn't allow digital payments or requires cancelled cheques to be returned to the customer within a certain period, based on state laws.
  • Prevention: Familiarise yourself with state laws governing your transactions.
  • Action: Investigate the specific laws in the state that the transaction was routed through and adhere to them for future transactions.

R51 – Item related to RCK entry is ineligible or RCK entry is improper

  • Description: An entry for a cheque that has been returned and re-presented is either not suitable for processing due to ineligibility, or the entry has been improperly prepared or executed.
  • Prevention: Check eligibility and correctness of the entries.
  • Action: Review your transaction to make sure it adheres to all applicable regulations and guidelines.

R52 – Stop payment on item related to RCK entry

  • Description: The account holder places a stop order on a bounced cheque that's being reprocessed electronically.
  • Prevention: Verify that no stop payment orders are in place before proceeding.
  • Action: Contact the issuing bank or the payer to resolve the issue.

R53 – Item and RCK entry presented for payment

  • Description: Both the original transaction and its corresponding RCK entry have been submitted, resulting in a duplicate transaction.
  • Prevention: Be cautious when presenting both item and entry.
  • Action: Reconcile the payment records to eliminate the duplicate transaction.

R61 – Misrouted return

  • Description: A reversed transaction has been sent to the incorrect institution.
  • Prevention: Ensure accurate routing numbers.
  • Action: Rectify the routing information and resend the transaction.

R62 – Return of erroneous or reversing debit

  • Description: A debit entry was sent in error or needs to be reversed.
  • Prevention: Double-check entries before finalising them.
  • Action: Issue a correcting or reversing transaction as necessary.

R63 – Incorrect dollar amount

  • Description: The dollar amount specified in the transaction is wrong.
  • Prevention: Verify transaction amounts before submission.
  • Action: Correct the amount and initiate a new transaction.

R64 – Incorrect individual identification

  • Description: The individual ID number in the return transaction doesn't match the one in the original entry.
  • Prevention: Confirm individual identification information.
  • Action: Update the information and reprocess the transaction.

R65 – Incorrect transaction code

  • Description: The transaction code is not correct for the type of transaction.
  • Prevention: Ensure transaction codes are correct.
  • Action: Update the transaction code and resubmit the transaction.

R66 – Incorrect company identification

  • Description: The company ID in the transaction doesn't match the ID number in the batch header record, which is a piece of meta-information regarding the transfer of a batch of transactions.
  • Prevention: Verify company ID information.
  • Action: Correct the company ID and reprocess the transaction.

R67 – Duplicate return

  • Description: The return entry was already processed, resulting in a duplicate.
  • Prevention: Track processed returns to avoid resubmission.
  • Action: No action needed, but review internal processes to prevent future occurrences.

R68 – Untimely return

  • Description: The return was not processed within the required time frame.
  • Prevention: Monitor deadlines for processing returns.
  • Action: Resubmit within the permitted time frame, if possible.

R69 – Field error(s)

  • Description: One or more fields contain incorrect information as entered by the ODFI, such as an incorrect account number or a name mismatch on the account, leading to the transaction being returned.
  • Prevention: Validate all fields prior to submission.
  • Action: Correct the errors in the indicated fields and resubmit.

R70 – Permissible return entry not accepted or return not requested by ODFI

  • Description: A valid return entry was not processed as it should have been, or a return was not requested by the ODFI.
  • Prevention: Adhere to ODFI rules for returns.
  • Action: Review the reasons for nonacceptance and proceed accordingly.

R71 – Misrouted dishonoured return

  • Description: A dishonoured return entry – an entry that was sent back to the ODFI once but was not done correctly and must be sent again – has not been sent to the correct institution.
  • Prevention: Ensure routing numbers for returns are accurate.
  • Action: Redirect the dishonoured return to the proper institution.

R72 – Untimely dishonoured return

  • Description: A dishonoured return was not processed within the required time frame.
  • Prevention: Stay up-to-date with deadlines for dishonoured returns.
  • Action: Resubmit within the allowed time frame, if possible.

R73 – Timely original return

  • Description: The RDFI is confirming that the original return was processed within the required time frame.
  • Prevention: Not applicable.
  • Action: No action needed.

R74 – Corrected return

  • Description: A previously improperly processed return has since been corrected.
  • Prevention: Not applicable.
  • Action: No action needed.

R75 – Return not a duplicate

  • Description: This is a response to rejection code R67. The RDFI is contesting an improper dishonour of a return entry by the ODFI​.
  • Prevention: Not applicable.
  • Action: No action needed.

R76 – No errors found

  • Description: This is a response to rejection code R69, in which the ODFI indicated field errors. This code serves as formal disagreement; the RDFI believes that these errors do not actually exist.
  • Prevention: Not applicable.
  • Action: No action needed.

R77 – Non-acceptance of R62 dishonoured return

  • Description: This is a response to rejection code R62, indicating that the RDFI has either already returned the incorrect transaction and the reversal, or it cannot recover the funds from the recipient as specified by R62.
  • Prevention: Understand criteria for acceptance of dishonoured returns.
  • Action: Check why it was not accepted and resubmit as needed.

In addition, the following rejection codes are associated with International ACH Transactions (IATs):

R80 – IAT entry coding errors

  • Description: Coding errors exist in the IAT entry.
  • Prevention: Validate coding for IAT entries.
  • Action: Correct the coding errors and resubmit the IAT entry.

R81 – Non-participant in IAT programme

  • Description: The RDFI doesn't participate in the IAT programme.
  • Prevention: Verify that the RDFI is part of the IAT programme.
  • Action: Either find an RDFI that does participate or avoid using IAT for the transaction.

R82 – Invalid foreign RDFI identification

  • Description: The foreign RDFI's identification is incorrect.
  • Prevention: Double-check identification details of the foreign institution.
  • Action: Correct the identification information and reprocess the transaction.

R83 – Foreign RDFI unable to settle

  • Description: The foreign RDFI cannot complete the transaction.
  • Prevention: Confirm the foreign institution's ability to settle transactions before initiating one.
  • Action: Work directly with the foreign institution to resolve the issue.

R84 – Entry not processed by gateway

  • Description: The entry hasn't been processed by the designated gateway, a service provider that acts as an entry point to the ACH network for financial institutions.
  • Prevention: Route transactions through a functional gateway.
  • Action: Resubmit the transaction through a valid gateway or contact the gateway for resolution.

R85 – Incorrectly coded outbound international payment

  • Description: An outbound international payment has been incorrectly coded.
  • Prevention: Verify the coding of international payments.
  • Action: Correct the code and resubmit the transaction.

How businesses should handle ACH rejections

Fewer ACH rejections means less operational burden for your team and an easier process for your customers, which could increase customer retention.

To prevent unnecessary ACH rejections and effectively manage them when they do happen, businesses need to implement a multifaceted strategy. This includes preventive measures, timely identification of issues and appropriate follow-up actions. Here are the steps you can take:

Preventive measures

  • Verify account information: Before initiating an ACH transaction, confirm the recipient's account and routing numbers. You can do this manually or through electronic verification services.

  • Secure proper authorisation: For recurring payments, make sure to obtain and securely store written authorisations from clients or vendors. Update these regularly to confirm they are valid.

  • Implement transaction limits: Set per-transaction and daily limits to avoid exceeding any allowed amounts, which could trigger a rejection.

  • Educate staff and partners: Regularly train employees who handle financial transactions on the intricacies of the ACH network, including compliance requirements, to reduce the chance of errors.

  • Use real-time alerts: Implement systems that provide real-time notifications for account balances and transaction statuses. This helps avoid rejections due to insufficient or uncleared funds.

  • Reconcile accounts regularly: Consistently reconcile bank statements with accounting records to catch any discrepancies that could lead to rejections.

Handling rejections

  • Identify rejections immediately: Set up alerts to notify key personnel as soon as a rejection occurs, enabling quick action.

  • Interpret the rejection code: Understand the specific reason for the rejection by referencing the ACH rejection code. This will guide your subsequent actions.

  • Communicate with involved parties: Notify the customer, employee or vendor about the issue and work together to resolve it. This might involve updating account information or securing a new authorisation form.

  • Make necessary corrections: Update your internal systems with corrected information and, if necessary, initiate a new ACH transaction.

  • Keep records: Document the rejection and subsequent actions taken to resolve the issue. This can be useful for audits and demonstrates a commitment to resolving issues effectively.

  • Evaluate and adjust procedures: After resolving individual issues, analyse them to identify any patterns or systemic problems. Make procedural changes as needed to prevent future occurrences.

Actions for specific scenarios

  • Payroll: For payroll direct deposits, double-check account information when onboarding new employees and whenever an employee reports a change in banking details.

  • Vendor payments: When paying vendors, confirm that you have up-to-date forms and authorisations to prevent transaction delays that can affect supply chain operations.

  • Recurring customer billing: For subscriptions or instalment payments, remind customers before each billing cycle to make sure they have sufficient funds and give them the opportunity to update their account information.

  • E-commerce transactions: For e-commerce businesses, integrate verification features into the payment gateway to confirm account details in real time.

  • High-value transactions: For transactions involving large amounts, consider additional verification steps, such as phone confirmations, to reduce the risk of rejections due to authorisation or account issues.

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