I am collecting rents monthly on behalf of several landlords, and I want to have the funds go directly from the tenant's account to the landlord's account.

 

Question:

How do I arrange for this?

 

Answer:

With ACH (or even a paper instrument - such as a check), you can only collect and pay funds from the account that you have ACH service with.  This is a function of the NACHA network, and not a limitation of ACH Universal or any other software or process.

 

You can create a debit ACH transaction and draft the funds from the tenant's accounts into your account.

You can then create a credit ACH transaction that will send funds to the landlord's account from your account.

 

 

What about an offset record (balanced file)?

Yes, you can certainly do this, but this again, will only create a debit into your account, and then a credit out of your account.

 

 

I used to have a processor that did this.  How did they do it?
When you used a processor, you had no debits or credits on your bank account - as these entries went in and out of your processor's bank account.  Often, a processor will collect on Day 0, and then wait two or three days and pay out on Day 3.  The funds are sitting in their account for Day 0 thru Day 3.

 

Regardless as to the timing of the debit and credit, even if they are the same day - the transactions go in and out of the processors account.

 

 

What are my options?

1. You can process the debits and credits the same day.

While this may relieve some of your customer's concerns, it may increase some of yours, as some drafts may fail due to ISF and other reasons.  As long as you are comfortable that you can collect any failed transactions from your landlord/owners - you should be fine in the long run.

 

Otherwise, we would highly recommend debiting, and then waiting at least two days - and then crediting funds out.

 

 

2. You can act as agent for the landlord/owner (not recommended)

Let's say you were collecting on behalf of two landlords, each with five tenants.

--Using ACH Universal, you would create two separate accounts (databases).  You would then create an ACH file for each landlord.  Each ACH file would only have the tenant transactions related to that landlord.  You would then need to upload the file to each of their banks using each landlord's password.

 

Assumptions:

The landlords would each need to enroll for ACH service with their bank.

This is assuming that each landlord would give you permission.

It also assumes that each landlord would qualify for ACH service, and that it makes financial sense given the monthly access fees.

 

While this certainly can work with a limited number of accounts, the logistics may make this operational unfeasible at a point.  To create, track and upload to multiple banks may become onerous and/or error-prone.