Best Practices for Dealing with an ACH Processing Error

Cachet has put together some best practices for handling an ACH processing problem.

This week, Cachet has been assisting several frantic payroll providers with their ACH processing needs due to an issue with their current provider.  We understand that no company is perfect and sometimes ACH processing errors can occur; being prepared by having a contingency plan can help your staff and your clients in case of emergency. The following are several best practices suggestions that Cachet recommends every payroll provider consider in the event of a problem with their ACH transactions.

Keep the lines of communication open.

This is probably the most difficult item, you will want to respond to each client inquiry immediately but may not have the staff to do so. Make sure to have a method of mass-communicating the most recent information available and assure your clients that you will respond to individual requests as quickly as possible.

Know your ACH provider’s policy for missed transactions.

What are your options and deadlines for your preferred solution? There are usually three options for dealing with a missed or delayed transaction;

• Wait. Your ACH provider likely re-submitted or has already pushed the ACH file through and it will clear the following business day. If you can wait, this is usually the preferred option as it will cause less manual work and is less costly in the long run.
• Run Paper Checks. If you require a same day resolution, run paper checks for all paychecks/direct deposits. Make sure to notify your ACH provider that you are running paper checks so they can stop those transactions from going through.
• Wire Transfer. Another same day resolution is to wire the funds, though wire transfers will require a considerable amount of manual work which you may not have enough time to complete depending on your processor’s wire deadlines. Wires also tend to be the most costly option overall.

Know your clients’ preference.

Keep a record of each client’s preferred resolution in the event of an ACH error on file. It is also a good idea to include legal language in your Employee Direct Deposit Authorizations and/or Client Service Agreements that addresses how a missed transaction or payroll will be handled. Cachet suggests including clauses regarding liability, reversals, and direct deposit timelines for late deposits to your client and employee level agreements. These are suggestions only and should be reviewed by your attorney for your specific needs and situation.

Try to be patient.

Patience is always easier said than done, especially when you have furious clients pounding on your figurative door with questions that you can’t answer. In the event of a missed or delayed ACH transaction, your ACH provider will also be experiencing a higher than normal volume of correspondence and may take some time to respond to your specific inquiry. Be prepared to wait for a response.

Understand your clients’ frustration.

While your ACH processor, their employee(s), their bank, or whomever may have been the root cause of the issue, your clients’ relationship is with you and you alone. They will expect you to have all of the answers and unfortunately you may not have the information they want, do your best to provide all of the information that you do have, explain their options, and listen to their frustrations. Sometimes a sympathetic ear can go a long way.
Cachet has a history of assisting clients who have encountered issues with their current ACH processors. With expedited implementation options and wire services, Cachet offers payroll providers the ability to continue offering direct deposit services for their clients even during uncertain times with their existing ACH provider. Our annual SSAE 16 and financial audits ensure that we adhere to strict internal operational standards, while our $50 million dollar crime bond adds an additional layer of protection for our client’s payroll transactions.

Thank You To Our Clients

As the holiday season approaches, Cachet Banq, Inc.  would like to take this opportunity to thank all of our clients and partners; past, present and future. It is because of your continued support that we move forward with the goal of providing you with quality ACH and payroll processing services in our ever growing market. We would not be a successful company without your business and we are excited to continue to work harder to fulfill your ancillary needs in the coming year.  So from our family to yours, we hope you have a wonderful Thanksgiving!

Warm regards,

The Cachet and PTM staff

P.S. Please enjoy the Thanksgiving fun facts that we found below!

Thanksgiving Fun Facts*

1. The first ever TV dinner was made in 1953 by Swanson when they had about 260 tons of leftover turkey to get rid of.
2. The Detroit Lions always play on Thanksgiving Day. This tradition started in 1934. The only exception was when the team went to serve in WWII.
3. Sarah Josepha Hale, a magazine editor, started a campaign in 1827 to make Thanksgiving a national day of thanks and prayer. In 1863 it was observed as such.
4. In an effort to boost retail sales during the Great Depression, Franklin Roosevelt tried to make Thanksgiving a week earlier. His efforts failed and after two years and a lot of name calling, Congress adopted a resolution to make Thanksgiving the fourth Thursday of November.
5. Benjamin Franklin tried to make the turkey the national bird.
6. A spooked turkey can run at speeds of up to 20 miles per hour. They can also burst into flight approaching speeds between 50-55 mph in a matter of seconds. 
7. An estimated 20% of cranberries eaten throughout the year are consumed on Thanksgiving.
8. Thanksgiving was declared a National Holiday by Congress 1941.
9. Fossil evidence shows that turkeys roamed the Americas 10 million years ago.
10. The North American holiday season (generally the Christmas shopping season in the U.S.) traditionally begins when Thanksgiving ends, on "Black Friday" (the day after Thanksgiving); this tradition has held forth since at least the 1930s.

*Thanksgiving Fun Facts were found on TIME, Reluctant Gourmet, and Celebrity Café.

B2B Networking: At Conferences, Part 2

Written by: Brooke Pettys, Marketing Specialist

To continue with this week's topic of networking, these tips discuss steps you can take after a conference has ended and ways to ensure a positive follow up response.  Additionally, the Cachet and PTM Regional Managers share some networking tips they have learned over the years that have proven to be effective for them. 

After a conference, the follow up is one of the most important factors when trying to generate new business.  Regional Manager, David Taub, says it’s best to wait 2-3 business days after a conference to follow up with any prospects you may have met.  This is because everyone, including you, is playing catch-up on the days they missed and therefore cannot devote additional time to create new professional relationships right away.  To make sure that you still stick out in your prospect’s mind days after a conference, always write down one personal or professional topic the two of you spoke about on their business card that you can mention again when you call them.  This brings up another important tip, which is making sure that you call first.  You can and should always follow up with an email, but calling a prospect gives you an advantage over the people who solely email and may never get a response back.  Additionally, try and connect with prospects on LinkedIn, or see if you have any shared connections or group between the two of you.  This can bring up another topic to discuss if you feel that your personal anecdote isn’t enough.

Tips learned from conferences:

Cachet and PTM Regional Managers shared great networking tips to follow/not follow that they have seen throughout the years at conferences.  

Scott Johnson stated that “you never want to be the person in the room just collecting business cards trying to meet everybody.  Everyone is trying to create relationships that can move their business forward, and people recognize when someone is not being sincere and are only interested in themselves and their company”.  A great networker is someone that can establish genuine connections and build relationships without having to constantly push their product.  It is better to establish five valuable and genuine relationships than trade 20 business cards without creating engaging in genuine conversation with the people you met.  

David Taub recommended that if you attend a conference alone, which is very likely, it is important that you have no qualms about speaking to competitors, alliance partners, and prospects.  This may take you out of your comfort zone, but keep in mind that most people attending conferences are either alone or with one or two other employees, so they are most likely feeling the same way as you.  

Ken Spitzer discovered that the best networking opportunities often occur at the optional events.  Dinners, golf games, fishing activities, etc. are a great time to get to know people on a personal level and build the relationship from there.  People will most likely remember the conversation they had with you about your shared love of rock climbing a lot more easily than the 5 minute pitch you gave about your company through the midst of the chaos during an event.

Connect with us for up-to-date expert information about the

Payroll industry and our company's products/services.

B2B Networking: At Conferences, Part 1

Written by: Brooke Pettys, Marketing Specialist

In a Business-to-Business industry, networking plays a very important role in obtaining clients, building meaningful professional relationships, and growing business for your company. A majority of networking is done at conferences, but actively networking in various other ways throughout the year is also an effective tool for increasing business. To provide better insight, Cachet and PTM Regional Managers share networking tips they have used throughout their career that have proven to be successful and effective.

Before a conference, it is important to research the conference as much as possible. Who is hosting the event? What is the main focus of each session and the overall conference? Is an attendee list provided? Are you familiar with the sponsor companies? Which companies are competitors, alliance partners, prospects, etc.? These are some of the questions you should be able to answer before attending a conference. Regional Manager, Scott Johnson, finds that it is also helpful to look up attending companies on LinkedIn and the employees representing them so that he knows exactly who he wants to talk to and how to approach them before he arrives at the conference. "Putting a face to a name is key," he says. 

Reaching out to as many attendees as possible before the conference can allow you to make a connection with prospects and set up meetings with vendors. By doing this, you already starting the networking process before you arrive at the conference. Regional Manager, Ken Spitzer, finds that when he actively networks before a conference people are then searching for him and his company, rather than him constantly trying to find and meet people on his own.   

During the conference, presentation is everything. Although the SWAG you pass out may not seem as important, it is something that draws attendees in. This, partnered with a professional yet friendly demeanor, can make you an instant success at the conference. Scott stated that he tries to engage in as many conversations he can while still keeping each one genuine. David Taub, Regional Manager, tries to make sure that both he and the company stick in someone’s mind rather than become another portfolio in a company’s pile at the end of the conference. Scott Johnson believes that swift initiative keeps you ahead of the game at conferences. Sending a quick email or LinkedIn invite to the people you personally met each conference day creates an instant connection and in turn makes you more memorable down the road.

Check back in tomorrow to see tips for follow-ups after a conference and networking that can be done throughout the normal work week.

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Payroll industry and our company products/services.

 

Risk Management for Business: Tips 6 - 8

To continue with our Risk Management topic for the week, these tips discuss safety steps you can take before accepting a client as well as procedures and the capacity of your tax software.

Tip 6: Know Your Client. You should consider steps to ensure you do not take on any "clients" that are fraudulent companies, "payroll jumpers", or companies that are financially unstable. Consider running credit checks on new clients, visiting their offices, calling to obtain references from other vendors with which they process, calling their former payroll service bureau, etc.  And don’t forget to do background checks on corporate officers.

Tip 7: Establish procedures for client NSFs. Your procedures should help ensure that you recover the funds as soon as possible. The procedures should include escalating NSF fees, procedures for holding or reversing payroll tax deposits, procedures on when to terminate a client for NSF activity, etc. Follow your procedures to the letter and don't fall into the "he's good for it" trap. Do not let your clients put your business at risk by soliciting unsecured loans!

Tip 8: Consider the capabilities of your tax compliance software. You may be able to offset risk by holding payroll tax deposits in the event of a client NSF. It is important to know the capabilities of your system in order to set your risk management policies. Does your system automatically track $100k payrolls? Does your system allow you to place clients on hold for NSFs? Does your system automatically hold payroll tax deposits if funds have not been received?

Once you have taken into consideration all factors that will contribute to your potential risk and your ability to control it, you need to establish written guidelines that are published, known and practiced by all employees.

Check back every day this week for more helpful tips regarding Risk Management that could potentially save your company a lot of time, money, and stress.

Connect with us for up-to-date expert information about the

Payroll industry and our company's products/services.

Risk Management for Business: Tips 3 - 5

We are continuing our Risk Management tips this week, which focus on common issues that businesses encounter when dealing with clients, NSFs, and cases of potential fraud.  Today the primary focuses are ACH providers and the responsibilities your employees have that can increase the risk of fraud for your company. 

Tip 3: Provide ACH options for all clients without comprising your risk exposure.  The most important way to reduce risk exposure is to secure funds to avoid fraudulent payrolls. Here are some recommendations that we provide to our clients:

·         Direct Wire or DrawDown® Fedwire allows you to offer Direct Deposit to high-risk clients. It eliminates client-funding risk entirely.

o        DrawDown® Fedwire – Puts the payroll provider in control.

o        Direct Wire – Client initiates wire for collection funds.  Payroll provider controls release/suspension of direct deposit transactions

With Cachet’s online system, you can stop the direct deposit transactions on Thursday and prevent them from going to the employees, eliminating the possibility of another set of NSFs.  

Tip 4: Separate your employees’ ACH responsibilities.  Separating the various ACH duties within your company to different employees can reduce your overall risk exposure from internal errors, preventing additional penalties and/or fees.  Can reduce potential ACH errors and/or missing ACH files.

Tip 5: Include proper legal verbiage.  Do you include the appropriate legal verbiage in your client service agreements?  Stating who is ultimately liable for the payroll funds in the event of unfunded ACH funds in your service agreement will also assist in establishing limits to your clients and enforcing those rules on an ongoing basis. This may ultimately reduce your NSFs. This will also protect your company against potential legal battles, should your client “skip town” or avoid funding their payroll(s).

Check back every day this week for more helpful tips regarding Risk Management that could potentially save your company a lot of time, money, and stress.

Connect with us for up-to-date expert information about the 

Payroll industry and our company products/services.