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High-Level Accounting Flow for ACH

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Accounts definition:

Synctera Ledger:
  • FinTech’s Customer Account: This is the FinTech’s customer account. ACH Credit, Debits and Returns will be posted to the customer account.
  • FinTech’s ACH Settlement Account: This account represents the ACH Settlement account, with ACH aggregated transactions for all the FinTech’s customer accounts. This account is used to track amounts to be settled with the Fed.
  • Bank Money in and out per FinTech: This account the amounts owed or owe to the FinTech’s FBO account (at the Sponsor Bank) for ACH payments
Sponsor Bank’s Ledger:
  • Sponsor Bank’s ACH Fed Account: This is the account in the Sponsor Bank’s Ledger to settle with the Fed. The FED will settle two payments daily ACH Credits and ACH Debits
  • FinTech’s ACH Settlement Account: This account tracks the FinTech’s aggregated ACH Credits/ ACH Debits for the Day
  • FinTech’s FBO Account: This account represents the aggregate balance for all of the FinTech’s customers at the time

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High-Level Money Movements:

Day 1:
  1. FinTech Customer originates ACH Debit for $150 via API in the Synctera ledger, as a result the FinTech’s customer account is credited and Settlement account is Debited
  2. Outgoing File is sent out to the network (Fed)
Day 2:
  1. Synctera Operations performs a sweep transaction with the aggregated value for all customer transactions from the settlement account to the ‘Money in and out account’ for day 1 that are effective for Day 1 or earlier
  2. FED Credits ACH Fed Account at the Sponsor Bank with the aggregated credits/debits for Day 1
  3. Sponsor Bank’s financial controller/ACH OPS login to the Synctera platform to see the ACH settlement account movements as well as the daily fund movement reporting
  4. Sponsor Bank debits/credits the FED settlement account and debits/credits the FinTech’s settlement account for the value of the credit/debit sweep transaction in the Synctera system - this value represents all the credits/debits for the FinTech to be settled with the Fed. If this does not match the settlement from the Fed, a reconciliation difference will exist that will need to be investigated based on the reconciliation function in the Synctera App
  5. After the Sponsor Bank moves all the Credit/Debits to the FinTech Settlement account, the Fed settlement account should be ‘zero’ and it is balanced against the FinTech settlement account
  6. From the Settlement account money is moved manually in the Sponsor Bank’s Banking Core to the FinTech FBO account - now the FinTech is balanced for ACH