USA ACH advance pay by company to our bank to the customer account...

[Gappi]

when sending ach in advance what happens?As a bank do we credit and debit our member account and how does it affect the bank general ledger account? Also what does it mean and do to our balance once the date is cleared in our bank account (does it mean we received the money)?

 

[Samir]

It depends on how this works in terms of who has the funds and when as well as what type of accounts the member accounts are (asset, equity, etc.) and if they have a debit or credit balance.

Basically, from the bank's perspective, you are paying in advance on behalf of a customer and have a very short term accounts receivable for the amount you sent. Since as a bank you'll will have multiple transaction like this every day, your accounts receivable account will always have a balance at any moment in time. It will only be zero in the rare cases where all ach have been received and when the bank is initially opened and closed.