ACH Return Code R21

ACH Return Code R21, labeled "Invalid Company Identification," is triggered when an ACH transaction is rejected because the Company ID (or Originator Identification) provided in the entry is incorrect, missing, or does not match the receiver’s records. This code typically applies to corporate transactions, where the receiving financial institution or SEC code requires a valid Company ID for processing.

Understanding R21 helps businesses and financial institutions to ensure proper identification in ACH payments, avoid rejected transactions, and maintain compliance with NACHA operating rules.

What Is an ACH Return Code

An ACH return code is a standardized identifier used in the Automated Clearing House (ACH) network to indicate why a transaction could not be processed successfully. 

When a bank or financial institution rejects an ACH payment (such as a direct deposit, bill payment, or transfer), it sends back the transaction with a specific return code, helping the originator understand and resolve the issue.

It is a three-character code used to explain why an ACH transaction was returned. It helps the Originating Depository Financial Institution (ODFI) and the Receiving Depository Financial Institution (RDFI) talk clearly during electronic transfers.

Learning about these return codes helps avoid problems with financial transactions.

What Is ACH Return Code R21

ACH Return Code R21 refers to an Invalid Company Identification. This code is triggered when an ACH transaction is rejected because the Company ID provided is either missing, incorrect, or doesn't match the records of the receiving bank or financial institution.

R21 occurs when the Originating Depository Financial Institution (ODFI) submits an ACH entry with an invalid Company ID, and the Receiving Depository Financial Institution (RDFI) is unable to validate the Company ID associated with the transaction. This return code is commonly seen in CCD (Corporate Credit or Debit) and other business-related ACH transactions that require a valid Company ID.

How to Fix ACH Return Code R21

To fix ACH Return Code R21, first verify that the Company ID provided in the transaction is correct, complete, and formatted properly according to the requirements of the receiving bank or financial institution. 

If the Company ID appears accurate on your end, contact the receiving bank (RDFI) to confirm any specific formatting or validation rules they may have for the Company ID. Once you identify and correct any discrepancies, update the Company ID and resubmit the ACH transaction with the correct information. 

After submitting the revised transaction, monitor your ACH returns to ensure the issue is resolved. If the problem persists, further collaboration with both your financial institution and the receiving institution may be necessary to fully resolve the issue.