What Is a Batch Header Record?
A batch header record is a standard piece of meta-information regarding the transfer of a group of data (a batch), usually within the banking field. The batch header record contains identifies the origin of a transaction and summarizes the debits and credits involved which is crucial for the successful processing of the batch. This is a key component of batch processing.
Although the batch header record is predominantly used in banking transactions, it is also used in other important transfers, such as between businesses, departments, and hospitals.
- In banking, several transactions are often bundled together in a batch for more efficient processing and clearing.
- The batch header record is the information and meta-data regarding a particular batch of transactions, used in ACH clearing.
- Batches may be labeled in the header record for such purposes as salaries or accounts payable.
How Batch Header Records Work
In banking, the batch header record is used in the automated clearing house (ACH), which is a batch-oriented electronic funds transfer system. To begin, the transaction is given a file header record to identify the origin and characteristics of the file. This is followed by a number of batches, each with its own batch header record. When combined with the entry detail records, the batch header record fully describes the transaction.
Each batch also contains entry detail records, each of which can be followed by one or more addenda records, as necessary or as required by the SEC code being used.
Batch processing is the processing of transactions in a group or batch. No user interaction is required once batch processing is underway. This differentiates batch processing from transaction processing, which involves processing transactions one at a time and requires user interaction.
While batch processing can be carried out at any time, it is particularly suited to end-of-cycle processing, such as for processing a bank's reports at the end of a day or generating monthly or biweekly payrolls.
Information Included in the Batch Header Record
Typically, a batch header record begins with a record type code, a numerical code that indicates that the record is a batch header record. The batch header record also identifies the company or organization from which the batch to follow originated. It will also identify the purpose of the entries found in the batch. For example, an originator might include a code like "Salary" or "Electric Bill" in the batch header code to indicate the purpose of the transactions to be described in the batch entries.
The batch header code will further indicate the effective entry date of all transactions included in the batch. This data applies to all the entry detail records in the batch.
If the originator wishes to vary or change any of the effective entry date or purpose data, they need to create a new batch in order to classify that data under the batch header record. For example, if an originator wants to process payments for both regular salary and employee bonuses, they need to create two batches with two batch header records, one for "Payroll" and one for "Bonuses." The information included in the batch header record is essential to the efficient and accurate processing of the batch.
Herman Hollerith (1860-1929) is credited with developing the punch card around 1890 when he was employed as a statistician for the U.S. Census Bureau. It was this punch card that became the seed for widespread batch processing around 50 years later.