Back Office Conversion and the ACH Network

Daniel Rich Galinson, national account manager for Solutran in Minnesota, is a key member of the development team for the company's innovative system for processing checks. Daniel Rich Galinson and team created this program as a back office conversion method.

Back office conversion gives companies a choice in how they process checks from point-of-sale transactions. It enables the check to clear as a paper check, substitute check, or image exchange, while also giving the receiver the option to process it as an ACH transaction. As an electronic method of transfer, the ACH (Automated Clearing House) transaction provides a quicker way for companies to receive funds.

In such a transaction, the company receiving the funds initiates a transaction via the ACH network. The network sends payment requests to the payers' financial institutions, at which time the bank checks to ensure sufficient funds are available. The network then places a hold for those funds, which typically are transmitted within two days. Once the funds arrive, an ACH operator transmits them to the receiver's financial institution for credit. The process can also work in reverse, should the customer need a refund or other payment from the company in question.