Deep Dive - ACH Reimbursement Timing
Why does my reimbursement take that long?
One of the most common questions we receive is regarding the timing of ACH reimbursements--particularly why amounts over the next-day reimbursement amount take 3-5 business days. There are a couple factors at play here.
Business Days & Cutoff Time
Banks only process transactions and ACH activity on weekdays that are not bank holidays. These are considered business days. Additionally, the business day on which a transaction will process depends upon whether or not a request is created before or after the cutoff time, which is 3pm PST.
For example, if your reimbursement is initiated at 9pm on Wednesday, the bank is not operating at that time, and thus it will not begin processing until the next business day.
If that same reimbursement starts processing on Thursday, and it's estimated to take 3-5 business days, this will cover a weekend, both days of which are not considered business days. So, assuming there are no bank holidays added into this mix, here is how that reimbursement timeline would play out:
Wednesday at 9PM: Reimbursement initiated after business hours; will be processed next business day by bank
Thursday: Your company's bank will begin processing the withdrawal request
Friday: Business day 1 has elapsed
Monday: Business day 2
Tuesday: Business day 3
Wednesday: Business day 4
Thursday: Business day 5
Why reimbursements over a certain amount take longer than one day
Reimbursements above the next-day reimbursement threshold are processed in approximately 3-5 business days. The biggest factor that drives this timeline is: risk.
Expensify is not a bank, so we do not issue reimbursements ourselves. Rather, your company will initiate a reimbursement from their own bank account, and we will facilitate the transfer of those funds by first withdrawing the funds from them, and then, once those funds are guaranteed, sending them to the recipient's account.
While your company's business bank account may notice the debit the day after the reimbursement is initiated, that doesn't mean the funds are yet guaranteed and/or available.
While rare, the bulk of fraud occurs within the first few days after a transfer of funds occurs, so we have to be particularly vigilant during this time. As such, we will make sure the funds will not be clawed back and are deliverable by waiting 1-3 business days to ensure they post (much like when you deposit a check and only the first $100 or so is available for a couple of days). You wouldn't want your reimbursement to be retracted, so we ensure that won't happen!
Once the funds have been guaranteed, we send them along to the recipient; depending upon your banks processing time which considers the same factors we considered above, this takes 1-3 business days. They, too, will ensure that the funds are guaranteed before making them available for use, and each bank sets their own standards for this timeframe.