Movie lovers know. Criminals of the silver screen followed the rules of the game and kept it business because, when things became personal, they lost clarity, made bad decisions, and increased their risk.

The same mantra is important when processing ACH Debits to businesses, follow the rules of the game, and keep it strictly business. Specifically, when you debit a business bank account using a consumer transaction code, the consumer protection rules apply. ACH Debits to personal accounts can be returned for 60 to 90 days as unauthorized.

Verify your customer is operating out of a business account, and that when you debit the business account the transaction is properly coded with a business SEC code (CCD or CTX). Doing so reduces the risk of payments being returned under the consumer protection rules.

Be sure to save your business debit authorization, and the documentation you have verifying the customer’s account is a business account. From time to time, a receiving bank may erroneously return a business debit to a business account using the consumer protection return period. However, if you can document to your payment processor or bank that the transaction was in fact an authorized business transaction to a business account, your processor should be able to dishonor those returns as untimely.

Finally, even if you have an ongoing relationship and payment arraignment with your business customer, if they want to change the account you are debiting, be sure to verify the new account is still a business account. Often small businesses will provide the owners personal account for payments, not understanding the distinction between business and personal accounts. For your own protection, verify and document that the new bank account is also a business account, and obtain a new debit authorization from the customer.

When processing business ACH payments through ACHWorks, keep it strictly business. If you want to learn more about the “rules of the game”, contact ACHWorks review the rules for yourself at NACHA.org. Be sure when debiting a business account that you have a valid authorization to debit the account, are using the correct SEC code, and that the customer’s account is a business account. Don’t let it become personal!

If you liked this article, and want to learn more about managing ACH payments, reducing risk, or saving money, please reach out to us. We want to be your trusted partner in the ACH payments space.