With the automated reverse wire from Cachet Financial Services—also referred to as Drawdown Fedwire®—payroll providers are in complete control: you submit payroll files to us and we virtually eliminate the risk of insufficient funds (NSFs) so you can sleep at night.
How It Works
We first need your client’s bank to authorize Cachet to perform automated reverse wires – most banks require a form to be filled out; if they don't have one, you can submit our form.
Then you select each client for whom you'll be using automated reverse wire through our web-based cloud platform.
Lastly, just submit all ACH payroll processing files two days prior to payroll (by 8pm ET/5pm PT) and each Drawdown Fedwire will be automatically performed, which is why we call it "automated reverse wire."
Note: because our automated reverse wire service requires your payroll file to be in a special format (we have our own NACHA specification), we currently only offer this service for users of the payroll and HCM software listed below. If you are interested in utilizing this service, please speak to your software provider about integrating Cachet's specifications.
Why Use Automated Reverse Wire?
The biggest benefit to this service is that it guarantees funds. There is virtually no possibility of NSFs because we won't send out employee funds until we confirm that we've received your client's wired payment. If we don't receive their payment in time, our system automatically suspends their payroll. If we do, their payroll is automatically released.
And everything is seamless: you do not need to manually update anything, send us multiple files nor use a different system – you can have normal ACH payroll processing and Drawdown Fedwire's in the same file.
Automated reverse wire is also about one-third of the cost as direct wires. However, automated reverse wire is not for everyone because there is a cost. From our experience, it's ideal for processing payroll for clients that have 25 to 30 or more employees.
Without automated reverse wires, payroll providers just have to hope for no NSFs, and hope is not a strategy. When you collect on Thursday and pay on Friday, you have to hope you don't have NSFs on Monday or Tuesday. You can require your clients to pre-fund their payroll, but they may balk at wiring their payroll funds to you or submitting payroll on Monday for Friday payroll considering the timing and direct wire costs.
- Payroll providers initiate automated reverse wires by submitting a standard ACH payroll file to Cachet – no additional paperwork or trips to the bank are required
- The Cachet system recognizes and automatically processes both automated reverse wire clients along with standard clients
- Once funds are confirmed, Cachet releases the employee direct deposit and tax payment transactions
- Payroll providers are protected from NSF exposure as direct deposits are not released to the Federal Reserve Bank for unconfirmed funds
- Payroll providers are in complete control and can sleep well at night