Assuming your definition of 'pre-noting' is: testing either a disbursement file or the contents in the disbursement file (such as a bank routing number and account number) for accuracy and validity. We have run across some general practices, for instance, some payroll processing firms that generate thousands of monthly ACH disbursements may test at least one or more pre-note transactions either before or during a payment cycle. If it is during a payment cycle, their system has the capability of providing a hard copy check disbursement for the actual payment. If the pre-note is successful, then it goes live during the second cycle. Generally, pre-noting at least once complies with general ACH operating rules and ensures that you have the right bank and routing information in your system. Give yourself adequate time before a live transaction in order to address any rejected transaction. One government agency in the state of North Carolina runs its pre-notes at least 10 days prior to generating a live transaction. Also, if your team is responsible for the set-up of the ACH bank information, a second re-keying of certain data, such as the bank routing number and account number, can help with accuracy. Internal controls should be evaluated to make sure that this information remains restricted to authorized users only who are insured through a fidelity bond.
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