Understanding the NACHA File Format: A Guide for ACH Payments

Introduction

NACHA files are essential for processing ACH payments, providing a standardized format for transmitting payment instructions between businesses and banks. Without a properly formatted NACHA file, ACH transactions may be delayed, rejected, or flagged for errors.

This blog explains the structure of a NACHA file, its key components, and how Profituity’s PlatformNext can automate and streamline NACHA file creation.

What Is a NACHA File?

A NACHA file is an electronic file that contains payment instructions for ACH transactions. It follows strict formatting rules set by NACHA (National Automated Clearing House Association) to ensure that payment data is processed accurately and securely.

Key Components of a NACHA File

A NACHA file is structured with multiple records, each serving a specific purpose in the payment process.

File Header Record (Record Type Code 1)

Contains details about the originator (business) and the file creation date.

Batch Header Record (Record Type Code 5)

Groups related transactions (e.g., payroll or vendor payments).

Entry Detail Record (Record Type Code 6)

Includes the recipient's bank account and routing number, payment amount, and transaction type.

Addenda Record (Record Type Code 7)

Provides additional information, such as payment notes or invoice references.

File Control Record (Record Type Code 9)

Summarizes and validates the entire NACHA file, ensuring data integrity.

How Profituity’s PlatformNext Simplifies NACHA File Management

Manually creating and validating NACHA files is time-consuming and prone to errors. Profituity’s PlatformNext automates NACHA file generation and validation, reducing the risk of payment delays or rejections.

Key Features:

• Automated File Creation: Generates error-free NACHA files from transaction data.

• Real-Time Validation: Identifies formatting errors before file submission.

• Built-In Compliance: Ensures every file adheres to NACHA rules.

Schedule your free demo of PlatformNext today to streamline your ACH payment workflows!