About ACH Reversals:

Reversals are used to correct erroneous ACH transactions.

According to Nacha rules:

• The exact amount of the erroneous transaction must be reversed.

• After the reversal is created, a new transaction must be originated for the correct amount.

Important:
Do not reverse an amount simply to make the net total correct. The reversal must match the original transaction amount exactly.

FAQ: Why not just create a correcting entry?

In theory, you could create a correcting entry instead of a reversal. However, this often fails because many accounts have a debit block in place.

A debit block is a banking service that prevents outside parties from debiting the account.

A proper ACH reversal works differently because:

• The batch header contains the word “REVERSAL”

• This allows the transaction to bypass debit blocks

• It follows the correct procedure defined by Nacha rules

• It creates a clear audit trail for compliance and record-keeping

For these reasons, using a reversal is the recommended and compliant method for correcting ACH errors.

Tip

If you just sent the ACH file to your bank, contact your bank immediately.

In some cases, the bank may be able to stop the transaction before it processes, which is usually easier than reversing it after settlement.

How to Create a Reversal:

1.Ensure you are in the correct account/database.

2. From the left navigation bar, select 'Create Reversals.'

1. Select the transactions that were uploaded to the bank in error. 

2. Click 'Create Reversals.'

3. Select 'Yes.'

4. Click 'Go to Unprocessed Records' to create your reversal file. 

5. From the side bar, click on the ACH Universal Home Page.

6. Click the 'Create ACH File' light green tile. 

7. Create your reversal file. 

When the ACH file is created, it will show the word 'REVERSAL' on the second line: