R04

What Is ACH Return Code R04?

ACH return codes are used to identify the reason an ACH payment has been returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures.

ACH return code R04, commonly referred to as “Invalid Account Number,” is a standard code used in Automated Clearing House (ACH) transactions to signify that there is an issue with the account number associated with the transaction.

Something as simple as a typo in the bank account number or selecting the wrong account type when initiating the ACH transaction can cause the transaction to be returned with code R04.

How To Address ACH Return Code R04

Nacha prescribes separate rules for handling each return code since each one represents a unique scenario. ODFIs (Originating Depository Financial Institutions) and RDFIs (Receiving Depository Financial Institutions) are responsible for handling ACH return codes according to these rules.

For example, if your business is attempting to initiate an ACH debit for $100, but you have incorrectly entered your customer’s bank account number, the bank would return the transaction with code R04. The customer’s bank must return the transaction with code R04 within 2 banking days.

To address R04, there are several things you can try:

• Double-checking both the account number and account type to verify they’re correct
• Attempting the transaction again
• Reaching out to your customer to provide alternate bank account to process the transaction, if neither of the above work

What Is An ACH Return Code?

ACH return codes identify the reason an ACH payment was returned by the recipient's bank. They make it easier for originating and receiving financial institutions to spot and communicate payment failures. Each code begins with 'R' followed by a two digit number. ACH return codes are standardized and maintained by NACHA, the governing body for the ACH network.