What must an Originator do prior to the initiation of the first credit or debit Entry?

An Originator is required to originate a Prenotification Entry prior to initiating the first credit or debit Entry. This step is essential in the ACH process as it serves as a test transaction that does not involve the transfer of funds but allows the receiving institution to verify the accuracy of the account information. The Prenote is sent to confirm that the account number and routing number are correct, reducing the risk of errors when actual transactions are processed.

This process is crucial because it helps ensure that subsequent transactions will not be rejected due to incorrect account details, which can lead to delays and complications. The Originator must wait at least three banking days after submitting the Prenote before they can begin transmitting actual Entries. This requirement highlights the importance of maintaining accurate banking information for seamless electronic fund transfers.