Reversals are used to correct erroneous transactions.
Per NACHA rules, the exact amount of the erroneous transaction must be reversed.
A second transaction must then be originated for the correct amount.
Important: Do not reverse an amount to make the 'net' correct.
FAQ: Why not just make a correcting entry - what is special about 'Reversals'?
In theory, you could just make a correcting entry - however - if the other party has a debit block (a service from their bank that prohibits others from drafting from their account) - it will fail.
What makes a 'Reversal' special is that it contains the word 'REVERSAL' in the batch header and it can pierce the debit block. Also, creating a reversal is the correct procedure and provides an excellent audit trail. See Nacha rules at the bottom of the page.
Tip: If you just sent the ACH File to your bank - call your bank to see if they can stop the transaction from being processed. It is always better to stop the transaction from occurring, than to try to get your funds back.
I. Creating a reversal - the easy method
From the Home tab select 'Create Reversals'.
Then highlight the row(s) that should be reversed and click the blue 'Reversals' button.
The software will want confirmation of the reversals to be included in the file:
Then, 'Go to Create ACH File Page'. Create the file as you normally would.
The file will show the word REVERSAL on the second line (the '5' record).
II. Creating a reversal manually - for entries not originated in ACH Universal
Only use this method if the original entry was not made from ACH Universal. [If the original entry was made in ACH Universal, use the 'Easy Method' above. It much easier.]
1. From the Home Page, select 'Add a Record' to display the 'Add a Record' screen.
2. Fill out the screen exactly as the original entry has it, except for the debit/credit selection and date.
Enter the opposite debit/credit type as the original transaction. If the erroneous transaction was submitted as a debit, you must create the reversal as a credit and vice-versa.
The date will be the new transaction date (not the original entry).
3. Click the blue 'Reversal' link at the bottom of the page. This will display the check-box below. Leave the check-box checked, and click 'OK' to save the transaction.
Then, 'Go To Create ACH File Page'.
III. Import an Excel or csv file
If you want to import a file, prepare an import file as you normally would, however, reverse the amount sign. If you originally had positive amounts, use negative amounts (yes, you may remap using the 'Amount_Reverse_Sign' column header).
In the 'Select a file' screen, in the lower left corner, there will be a check-box titled 'Reversal'. Check this box. The only function of this check-box is to enter the word 'REVERSAL' in the appropriate location within the ACH file.
Remember: You must reverse the sign of the transaction yourself in this option.
Notes:
--You may edit a reversing transaction prior to transmission, just as you would any other transaction, however, you may not change the status of a transaction from reversing to regular or vice versa.
--The reversal process simply creates a transaction. Follow your normal procedures for creating and transmitting an ACH file.
--Treasury Software does not warrant the viability of any Return that you create as to whether it is within the acceptable date range or other conditions set by NACHA.
--If there aren't available funds in the other party's account - even if the reversal was performed in accordance with Nacha, the transaction will not be honored.
Nacha Rules
Please remember that a reversal is not always guaranteed to be successful.
Reversals can be returned/contested/dishonored for a variety of reasons.
To increase your odds of acceptance, adhere to the Nacha rules including:
1. Reversals should be dated within 5 business days of the original transaction.
2. Reversal should only be created:
--If the original payment was for the wrong dollar amount, or
--If the original account number provided was incorrect, or
--If duplicate transactions occur
