NACHA File FAQs
In general, a NACHA file is a way to communicate requests to transfer funds electronically. It’s an electronic file that contains specific payment instructions to a bank, including bank account numbers and dollar amounts to be deposited. See a full definition of NACHA File/ACH File in our glossary. For further reading about these electronic files, see our related blog article What is ACH?
If you use direct deposit to pay your employees, here are some commonly asked questions about NACHA files.
What does NACHA stand for and what do they do?
NACHA stands for National Automated Clearing House Association. NACHA is an organization that establishes the standards and rules followed by financial institutions for transferring payments. A NACHA file meets the format specifications set forth by NACHA.
Is a NACHA file the only way to pay my employees with direct deposit in Patriot Software?
If you choose our direct deposit service, Patriot Software will send a NACHA file automatically for you. If you choose to pay direct deposit another way, your financial institution or third-party provider may provide you with other options for sending direct deposits to your employees, such as a web application. Keep in mind that such applications may require you to manually maintain your employees direct deposit information and enter the net amount to be paid each time you process a payroll.