How ACH Payments Work in STRATAFOLIO

What is ACH

The Automated Clearing House (ACH) is a secure electronic network in the United States that enables direct transfers of money between bank accounts. In this case, tenants can conveniently pay rent to their landlords without needing paper checks or manual transfers.

How ACH Payments Work in STRATAFOLIO

STRATAFOLIO offers ACH (electronic bank-to-bank payment options) for tenants and landlords. Partnering with STRATAFOLIO to receive payments from Tenants means less manual tracking, less time spent on tracking payments, and overall increased efficiency.

Upon setup, the initial ACH verification can take up to two weeks.

• STRATAFOLIO offers both one-time and monthly payment options, as well as autopay.
• Both parties must have online banking options at the bank they will be using.
• Tenants can only make payments if there is an invoice to link to them.
• Charges may apply for NSF or for reversal of transfers.
• Transactions are hassle-free, and the amount a tenant can pay depends on the account type.
  • Standard account type: Allows payments up to $50K over any 30-day Period, including fees.
  • Premium account type: Allows payments up to $100K per transaction, including fees.
• Transactions usually take 2 to 7 business days (excluding bank holidays), depending on the lending institution. Based on the lending institution, there are two transfer types.
  • Expedited: If supported by the lending institutions, these transfers can take between 2 and 4 business days (excluding bank holidays) for the money to appear in your account.
  • Regular: These transfers can take between 4 and 7 business days (excluding bank holidays) to appear in your account. If a tenant had to manually verify their account, their lending institution would most likely not support the expedited method.

What are the ACH Processing Times

There are two possible transfer types.

Expedited Transfers
Expedited transfers typically complete within 2 to 4 business days (excluding bank holidays). This faster processing is used when the property’s payment settings allow expedited transfers and the tenant’s bank account supports electronic balance confirmation.

Regular Transfers
Regular transfers usually complete within 4 to 7 business days (excluding bank holidays). These transfers may occur when faster processing is not supported by the connected bank account or when the property’s payment settings require regular processing.

Why Some Payments Are Processed as Regular Transfers

Even when expedited transfers are available, some payments may still be processed using regular ACH timing. This may occur if:

• The property’s payment settings are configured to use Regular transfers
• The bank account was connected using manual account numbers instead of an online banking login
• The system cannot confirm the account balance electronically
• The bank does not support faster ACH processing

In these situations, the system will automatically process the payment as a regular ACH transfer to ensure the payment can still be completed.

Account Verification (Micro-Deposits)

To securely connect a bank account for ACH payments, STRATAFOLIO uses a micro-deposit verification process. This process confirms that the bank account entered belongs to the user setting up ACH payments.

Here is how verification works:

1. After you enter your bank account information, STRATAFOLIO sends two small deposits (micro-deposits) to the account you provided.
2. These deposits typically appear in your bank account within a few business days.
3. Once you receive them, return to STRATAFOLIO and enter the exact amounts of the two deposits.
4. If the amounts match, your account will be successfully verified and activated for ACH payments.

IMPORTANT: Micro-deposits must be verified promptly. If the account is not verified within the allowed timeframe, the deposits may expire, and you will need to restart the verification process.

ACH Fees

The landlord can elect to pay the ACH convenience fee themselves or pass it along to the tenant. The cost is .05% with a $2.50 minimum per transaction.

ACH Requirements

Before ACH payments can be used in STRATAFOLIO, the following requirements must be met:

1. Online Banking Access
Both the owner (landlord) and tenant must have access to online banking with the financial institution they intend to use for ACH payments.

2. Bank Account Verification
Any bank account used for ACH payments must be verified using the micro-deposit verification process described above.

3. Active Invoice
Tenants can only make ACH payments after an invoice has been created by the owner or property manager.

4. Initial Setup Time
During the initial setup, ACH verification and approval may take up to two weeks, depending on bank processing and verification requirements.

Once these requirements are met, tenants can make one-time or recurring ACH payments through the STRATAFOLIO platform.

ACH Payment Limits by Account Types

You will have the option to set up your account as Standard or Premium, which will affect the payment limit for your ACH account.

Standard – This account type allows you to make payments of up to $50,000 (including applicable fees) over any 30-day period. During the set-up process, you must provide your First Name, Last Name, and Email Address to create this account type. Please note that to make payments exceeding $50,000 in any 30-day period, including fees, you will need to upgrade to our Premium plan. The good news is that there is no extra cost for this plan. It only requires you to provide a bit more information than the standard plan.

Premium – This account type allows you to make payments of up to $100,000 per transaction (including applicable fees). The required information varies based on the Business Type you have. Details are provided in the table below.

Account Type	Max Payment Limit	Business Types	Information Required
Standard	$50,000 Over Any 30-Day Period	–	First Name, Last Name, and Email Address.
Premium	$100,000 Per Transaction	Personal	In addition to the information required for the Standard Customer Type, you will be required to provide Your Date of Birth and the Last 4 Digits of Your SSN.
Premium	$100,000 Per Transaction	Sole Proprietorship	In addition to what is required for a Premium Personal Account, you will be required to provide Your Business Name, Industry Classification, Business Location, and Business EIN.
Premium	$100,000 Per Transaction	Corporation, LLC, and Partnership	In addition to what is required for a Premium Sole Proprietorship account, you will need to provide information on the Account Admin, Controller, and Beneficial Owner.

ACH Terms and Acronyms

Anyone using the Automated Clearing House (ACH) may encounter an error code, also referred to as an ACH return code. In this knowledge base, we will cover potential errors that someone using ACH may encounter. We’ll cover all these error codes. Explain what each one means, its impact on you, your funding source, and how you can resolve the error.

Although using ACH for commercial real estate rent payments and collections offers convenience, significant time savings, automation, security, and reliability, sometimes errors can occur. Some factors are beyond our control, while others may come from unintentional actions we take. Understanding errors can help mitigate these issues.

If you need assistance setting up your ACH service in your tenant portal, check out our other knowledge base article. Tenant Payment Integration (ACH) in STRATAFOLIO

The acronyms and terms listed below will appear in the comprehensive table containing this information:

Acronym or Term	Description
ODFI	Originating Depository Financial Institution
RDFI	Receiving Depository Financial Institution
OFAC	Office of Foreign Assets Control
RCK	Re-presented Check Entry
Blocklisted	If a funding source is added to the blocklist as a result of an ACH return code, you will need to contact your Customer Excellence Manager to get it removed.

Potential ACH Errors

The table below outlines potential errors that someone using ACH may encounter. It includes the ACH error codes, their impact on you and your funding source, and the steps to resolve the error. For more information, you can check out Dwolla’s FAQs. Recognizing ACH error codes early can save time and prevent further complications.

Error Code	Description	Explanation	Return Time Frame	User Impact	Funding Source Impact	Action to Resolve The Error
R01	Insufficient Funds	The account does not have enough funds to cover the debit.	2 banking days	None	None	Confirm that there are sufficient funds in the account before retrying the transaction.
R02	Bank Account Closed	The account has been closed.	2 banking days	None	Unverified and Removed	Check if the account is closed. If it is, update with a valid funding source or provide a new account.
R03	No Account/Unable to Locate Account	The account number does not correspond to a valid account.	2 banking days	None	Unverified and Removed	Check the account details. If they are wrong, update the funding source with the correct information. Make sure the account number and routing number are accurate.
R04	Invalid Bank Account Number Structure	The account number structure is not valid.	2 banking days	None	Unverified and Removed	Check the account number format and make necessary updates to the funding source. Ensure the format is correct and review for any errors.
R05	Unauthorized Debit to Consumer Account Using Corporate SEC Code	A corporate debit entry was made to a consumer account without authorization.	60 calendar days	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Use the correct SEC code: Only use CCD/CTX for business accounts, not consumer ones. Or, Get proper authorization: Always collect and retain valid authorization before debiting any account. Lastly, Be ready to show proof: If an unauthorized return occurs, Dwolla’s Risk team may request authorization documents to respond to their partner bank. Have those ready in case they reach out.
R06	Returned per ODFI’s Request	The Originating Depository Financial Institution (ODFI) requested the return.	Not Defined	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Coordinate with the ODFI to understand the return reason and take action.
R07	Authorization Revoked by Customer	The customer revoked authorization for the debit.	60 calendar days	Deactivated	Unverified and Removed	Obtain a written statement of revoked authorization, and reactivate the account only after resolving the issue.
R08	Payment Stopped	The receiver requested a stop payment on the debit.	2 banking days	None	Unverified and Removed	Talk to the customer to understand why they stopped the payment. Resolve their concern before retrying the transaction. Confirm the stop payment with the receiver and check if it’s okay to proceed with the payment.
R09	Uncollected Funds	Sufficient balance exists, but uncollected items bring the balance below the debit amount.	2 banking days	None	None	Ensure all deposits have cleared before retrying the transaction. If there are pending items, wait for them to clear or deposit additional funds.
R10	Customer Advises Originator is Not Known to Receiver and/or Originator is Not Authorized by Receiver to Debit Receiver’s Account	The customer claims not to know the originator or did not authorize the debit.	60 calendar days	Suspended	Unverified, Removed, and Blocklisted	Get a written statement of the unauthorized debit and investigate the issue before retrying the transaction. Provide proof of authorization to the customer.
R11	Customer Advises Entry Not in Accordance with the Terms of the Authorization	The debit entry was inaccurate or improperly initiated.	60 calendar days	Deactivated	Unverified and Removed	Request a written statement for the unauthorized debit. Resolve the issue and obtain a new authorization before retrying the transaction.
R12	Branch Sold to Another DFI	The account was sold to another financial institution.	2 banking days	None	Removed	Update the funding source with the new bank account details.
R13	Invalid ACH Routing Number	The routing number is not valid.	Next File Delivery Time Following Processing	None	Unverified, Removed, and Blocklisted	Correct the routing number and update the funding source. Ensure the new routing number is valid.
R14	Representative Payee Deceased or Unable to Continue in That Capacity	The representative payee is deceased or unable to continue.	2 banking days	Suspended (If already deactivated, status remains unchanged)	Removed	Verify the status of the representative payee. Update the account information accordingly.
R15	Beneficiary or Account Holder Deceased	The beneficiary or account holder is deceased.	2 banking days	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Confirm the account holder’s status. If deceased, close the account and update the funding source.
R16	Account Frozen/Entry Returned per OFAC Instruction	The account is frozen or the entry was returned per Office of Foreign Assets Control (OFAC) instruction.	2 banking days	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Contact the RDFI to understand the reason for the freeze. Resolve any compliance issues before retrying the transaction.
R17	File Record Edit Criteria/Entry with Invalid Account Number Initiated Under Questionable Circumstances	The entry contains an invalid account number or was initiated under questionable circumstances.	2 banking days	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Review the transaction for errors or suspicious activity. Correct any issues before retrying the transaction.
R20	Non-Transaction Account	The account is a non-transaction account.	2 banking days	None	Removed, and Blocklisted	Confirm the account type. If it’s a non-transaction account, update the funding source with a valid transaction account.
R22	Invalid Individual ID Number	The individual ID number is invalid.	2 banking days	None	Unverified	Verify the individual’s ID number. Correct any discrepancies and update the funding source.
R23	Credit Entry Refused by Receiver	The receiver refused the credit entry.	2 banking days	None	Unverified and Removed	Contact the receiver to understand the reason for refusal. Address the concern before retrying the transaction.
R29	Corporate Customer Advises Not Authorized	A corporate customer advises the debit was not authorized.	2 banking days	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Obtain a written statement of unauthorized debit. Investigate and resolve the issue before retrying the transaction.
R31	Permissible Return (CCD and CTX only)	The return is permissible under CCD and CTX rules.	Not Defined	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Coordinate with the ODFI to understand the reason for the return and take appropriate action.
R37	Source Document Presented for Payment	The source document was presented for payment.	60 calendar days	None	Removed	Ensure the source document is valid. Address any issues before retrying the transaction.
R38	Stop Payment on Source Document	A stop payment order was placed on the source document.	60 calendar days	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Contact the receiver to understand the reason for the stop payment. Address the concern before retrying the transaction.
R51	Item Related to RCK Entry is Ineligible or RCK Entry is Improper	The item related to a Re-presented Check Entry (RCK) is ineligible or improper.	60 calendar days	Suspended (If already deactivated, status remains unchanged)	Unverified, Removed, and Blocklisted	Obtain a written statement of improper entry. Investigate and resolve the issue before retrying the transaction.

More Details on Some of the Listed Error Codes:

R11 Error Code:

Why Did I Get An R11 Error?

• Bank’s Perspective: The customer’s bank returned the debit because it believed the entry did not match the terms of the authorization. This could be the wrong amount, the wrong date, or a lack of required notice. It’s still considered an “authorized” debit, just processed incorrectly.
• Consumer Protection Angle: Many banks issue R11 when their customer disputes a transaction they had authorized but says was executed incorrectly. This is different from R10 (“unauthorized”), which kills the mandate entirely.

What Dwolla’s Doing Automatically For The R11 Error:

• Funding Source Removal: Dwolla proactively deactivates the funding source and account when it sees an R11 code generated by the user’s bank. This is a risk-control measure to stop further returns.
• Your Option to Reactivate: You can re-enable the account and let the user re-add their funding source if, after reviewing, you’re confident the transaction error is fixable and the customer still consents.

What You Should Do Next For The R11 Error:

1. Talk to the User: Confirm with them why they or their bank challenged the entry (wrong date, wrong amount, etc.). This is the “ultimate source of truth” because only they can clarify.
2. Correct the Error: If it was, say, a timing mismatch or an amount error, fix it.
3. Re-submit Properly: Nacha rules allow you to re-originate once corrected without a new authorization, provided the original mandate is still valid.
4. Document the Resolution: Keep records showing what was wrong and how it was fixed. This is important if your return rates get reviewed.

The key difference here is that R11 is fixable. It doesn’t mean fraud or lack of authorization; it just means your debit didn’t exactly match the authorization. Dwolla’s workflow is conservative (blocking then allowing you to re-enable), but that’s normal for ACH originators managing network risk.

Best Practices for a Seamless ACH Experience

1. Enable two-factor authentication to add an extra layer of security to your account.
2. Do not share your login information with anyone.
3. Monitor your transactions regularly and ensure that your correct payment amounts are always entered.
4. Do not mark the stratafolio.com domain as spam. This could prevent you from receiving important alerts we send out.
5. Landlord: Ensure invoices are always added prior to the ACH transaction due date.
6. Tenant: Set up your autopay and leave the amount field blank to ensure you pay the full invoice amount. If you add an amount, ensure you update it when your lease escalations take effect to avoid underpaying your rent.

We hope this information provides you with the details you need to ensure a pleasant ACH experience.

How to Check ACH Transfers

Monitoring Automated Clearing House (ACH) transfers is an important part of managing payments in STRATAFOLIO. Both administrators and tenants can review ACH activity directly in the platform to confirm successful transfers, check for pending items, or identify failed payments.

This article explains the two main ways to check ACH transfers: through the admin view and through the tenant portal.

Checking ACH Transfers as an Administrator

Administrators can see all ACH activity tied to their organization. To view transfers:

1. From the left-side navigation menu, navigate to Hierarchy > Entities.
2. Select the i (information) icon next to the Entity record.
3. Open the ACH Integrations tab.
4. Select the i icon next to the ACH integration you want to review.
5. Select the Transfers tab.

This will display all transfers associated with that integration, including details such as:

• Transfer date
• Status (Pending, Completed, Failed)
• Linked tenant or owner account

From here, you can quickly verify whether payments have cleared or if further action is needed.

Checking ACH Transfers in the Tenant Portal

Tenants can also monitor their own payments directly through the Tenant Portal.

1. Log in to the Tenant Portal.
2. Open the Payments tab.
3. Review the list of payments, including ACH transfers, with their dates, amounts, and statuses.
   

This gives tenants visibility into their payment history and confirmation of whether transfers were processed successfully.

Why Checking ACH Transfers Matters

Being able to view ACH transfers in real time provides transparency for both owners and tenants. It helps you:

• Confirm payments were received on time.
• Identify failed or returned transactions early.
• Improve communication between owners and tenants by ensuring both parties can see the same payment records.

Next Steps

• To learn about ACH for ownership distributions, visit Owner Payment Integration (ACH) in STRATAFOLIO.
• To learn more about ACH for tenants, read ACH Payments for Tenants in STRATFOLIO.

Best Practices for using ACH

• Stop Autopay Promptly
  • If you no longer plan to use STRATAFOLIO’s ACH, stop autopay immediately to prevent failed or partial payments.
• Confirm Payment Responsibilities
  • When autopay is stopped, tenants are responsible for ensuring payments are made manually and on time.
• Use One-Time Payments for Flexibility
  • If autopay doesn’t meet your needs (e.g., irregular invoice amounts), tenants can make one-time payments directly in the Tenant Portal.
• Communicate Changes with Tenants
  • If you, as an owner or property manager, decide not to accept ACH payments in STRATAFOLIO, inform tenants so they can adjust their payment methods accordingly.