I work for a firm that submits approx 5000 ACH payments per month. Unfortunately, roughly 20% of them are returned NSF, and another 10% or so for the usual reasons.

My question is, is there a way to determine electronically if the funds are there prior to submitting the ACH payment? I realize the funds may not be there later but I would still like to know. Also, when an NSF comes back, how can I monitor the account to see if the funds show up?

Submitting ACH debits is indeed a gamble. However, a 20% return rate is extraordinarily high in my experience. Even 10% is something to be worried about.

Among other things, see if your ODFI offers redistribution, a feature in which NSFs are automatically converted back into customer debits and sent out again for a second or third presentment. (The debit can't be sent to the customer more than three times in all.) This could help increase your collection rate. Also, especially if these are consumer debits, consider making them effective on dates that coincide with most payroll cycles. Of course, this would have to covered in your ACH agreements with the receivers if these are recurring items, because if your customers have specified a particular date, you can't just change it.

Thank you very much for your reply.

We have been approached by firms that want to handle our NSF re-presentation. They claim they can monitor the person's account and then debit it when the funds show up. I am guessing then that they just keep resubmitting it but it but how would they avoid getting hit with the NSF fee again and again? Are you aware of these firms?

I just spoke to someone that used to work for Telecheck, which offers one of those verification of funds services for merchants for checks. They also do a lot of ACH work and a lot of collections. He said that they don't have any magical technology that allows them to ascertain balances prior to sending ACH items. I'm not aware of any automated solution for that at this time.

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ACH NSF's

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Bless you!

(I can't see that post title without hearing a sneeze!)