Why do can I no longer backdate (-1, -2) the debit to the employer?

Jessica Benzakein — Wed, 06 Jun 2007 11:38:26 GMT

Payroll merchants should not set their software to prefund or back date the debit. (-1, -2, etc) The reason for this is that our policy states that all credits must be prefunded. Because of this requirement, the AllianceACH Gateway will automatically change the date of a debit by either 1 day or 2 day - depending on what the prefund requirement is for that payroll merchant.

As an example (XYZ Payroll Services is set to a 1 day prefund requirement):

XYZ Payroll Services uploads and imports a file containing debits and credits to take place over the next week. They have the following time line set up for a few of the merchants:

a. Debit Dandy Dog Pet Groomers $1500 on June 14th

b. Credit XYZ Payroll Services $1500 on June 14th

c. Debit XYZ Payroll Services $1500 on June 15th

d. Credit 3 employees a total of $1500 on June 15th

What will really happen is (note that Alliance has changed the date of the debit):

a. Debit Dandy Dog Pet Groomers $1500 on June 13th

b. Credit XYZ Payroll Services $1500 on June 14th

c. Debit XYZ Payroll Services $1500 on June 14th

d. Credit 3 employees a total of $1500 on June 15th

The employer will see the credit come out of his account sooner than he was expecting and depending on XYZ Payroll Services' bank, the debit from their account may take place prior to the credit to their account on the 14th.

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Why do can I no longer backdate (-1, -2) the debit to the employer?