Failed distributions went from 11% of payments to 1.4% by adding one step ten days early

Sponsor had 140 LP entities and every quarter the distribution run produced returned ACH payments. Q1 was 16 failures out of 141 payments, so 11%. Each failure cost roughly 25 minutes of someone chasing the LP by phone and email, plus a re-run fee from the bank, plus one LP who got loud in a group chat with three other LPs because his payment was nine days late and he assumed the deal was in trouble. That last one is the real cost and it doesn't show up anywhere.

The causes, once I sorted them: seven were bank account changes after a local bank was bought and routing numbers changed, four were name mismatches where the account was in a married name and the subscription was in a maiden name, three were trust re-titling where the LP moved the interest into a revocable trust and told nobody, two were plain typos in the original onboarding form.

The fix is a pre-distribution verification, ten business days before the run. Automated email to every LP showing the last four digits of the account on file and the payee name, asking them to reply only if something is wrong. Anyone who says something changed gets a phone call on the number in the record, not the number in the email, and a small test transfer before the real one. That callback rule exists because payment change requests are a standard fraud pattern and email alone verifies nothing.

Q3 was 2 failures out of 143, so 1.4%. The verification run costs me about 3 hours plus whatever the phone calls take, usually 5 or 6 of them.

What I'd keep is showing the last four digits back to the LP. People don't read a request to check their details. They do read their own account number and notice when it's wrong.