In the following scenario is the account officially overdrawn? At the end of business day Wednesday 1/4/12 is 2pm and there is $50 in the account. A $50 cash deposit is made on 1/4/12 at 3pm into the same account. Item to be paid for $75 hits the account the night of 1/4/12. No other charges to the account for that night. Item hits non-post and is paid and not charged the following business day.

Would the account have to go into the negative to be overdrawn or is it if the account does not have the funds available at the end of the business day when payments are presented against it?

When is your cut off? If it's end of day, then I would think your processor should aggregate all deposits/items same day and the account would never truly be in the negative.

Cut off is 2pm and the cash deposit was made at 3pm on the same calendar day.