ACH payments are submitted to your bank as a file in the format set by Nacha, the organization that governs the US ACH network. A file holds batches of entries, each with the receiving bank’s routing number, account number, amount and a trace number. Vendor payments usually go as CCD entries and payroll direct deposit as PPD.
Why it matters
ACH is cheaper and faster than checks, but the file contains bank account numbers, and a changed vendor bank account is the most common payment-fraud scheme. Who can change vendor banking, and who can release a file, matters more than the file itself.
Worked example
A Friday payment run pays 22 vendors by ACH. The NACHA file is generated when the controller releases the run, downloaded once to the bank portal, and the payments post as Dr Accounts Payable / Cr Cash (illustrative).
Common mistakes
- Saving ACH files to shared drives.
- Accepting a vendor’s bank change by email without a call-back.
How os.construction handles it
In the accounting preview, NACHA files are generated from a released payment run (an export; no money moves), and a vendor bank change needs a second approver and puts payments on a cooling-off hold. See Security and controls.