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Business to Business ACH: Growing Your Business the Right Way

Lifestyle image of woman paying bills online from home

What is business to business ACH? It’s a way to save time while protecting yourself against check fraud when it comes to paying your business bills.

Most businesses have to pay a lot of other businesses to keep things running. Rent, electricity, internet, printing, shipping, advertising, raw materials—the list goes on. For some companies, the number of business to business payments they have to make every month can run into the thousands.

And a lot of those bills are still being paid by paper check.

Hardly anyone writes paper checks in their personal life anymore. They’re inconvenient. They can get lost or stolen in the mail. And you have to keep ordering new ones.

But businesses have been slower to make the switch.

The ACH network can seem like a hassle to figure out, and for many small businesses, checks just seem easier out of habit, despite the inconvenience—and the risks. But with the right ACH provider, business to business ACH transactions can be the best of both worlds: convenient and fast, without the risk of check fraud.

How business to business ACH processing works

Business to business ACH payments transfer funds electronically from one bank account to another through the Automated Clearing House network, even if those accounts are at different financial institutions. They don’t require a debit card, but they do require businesses to set up permission for the connection on both sides.

That’s one of the reasons ACH credit for business (and ACH debit for business) haven’t taken off as quickly as they could have. Businesses don’t want to fill out sensitive information like routing numbers and bank accounts and share them directly with another business.

Even though they do that every time they mail a check.

Still, the ACH paperwork takes things a step farther, authorizing payments between the two accounts, and the legalese can be daunting. Modern ACH payment processing providers remove that concern by keeping each business account separate.

Your business fills out your information for your account, and their business fills out their information for their account.

Both businesses join the network, and then they can send and receive ACH payments as often as they like, without ever seeing each other’s information.

Benefits of ACH processing

Once your business is in an ACH payments provider network, there are a lot of advantages to ACH processing.

Benefit 1 - Convenience

Business to business ACH payments are for businesses a bit like PayPal or Venmo are for people. They’re incredibly convenient. Payments happen electronically, and if you’re paying through the right ACH payments provider, you can handle those payments no matter where you are, on your computer or even on your phone.

Because they’re digital, they’re also easy to set up as either one-time or recurring payments, reducing the amount of time businesses have to spend on routine transactions.

Benefit 2 - Speed

For many small businesses, the biggest speed advantage comes from accepting ACH payments, rather than making them. As soon as that payment has been sent digitally, they’ll know for sure that it’s on the way and that they can count on that payment, even if it might take 2–4 business days for the funds to be available.

For mid-to-large-size businesses, the speed of paying can be an even bigger advantage. Why? Because their accounting teams don’t have to reconcile their bank account(s) against dozens or even hundreds of outstanding checks that have been written and mailed but not yet cashed.

Which also means their CFO can be a lot more precise in their cash-flow planning.

Benefit 3 - Security

Since businesses have been slow to move away from paper payments, check fraud is still all too real. In fact, businesses are especially vulnerable because they often have a lot of checks going in and out with USD amounts that run into the thousands (or more).

ACH payments move electronically from one bank account to another, avoiding the need for checks. And, because an ACH payments provider like Bill.com can handle the onboarding process for each business separately, businesses can make and receive those electronic payments without sharing their bank account information with each other.

How do I get ACH payment processing?

Signing up to join the Bill.com network is simple and straightforward. Once you sign in and connect a bank account, you’re ready to make and receive ACH payments, as well as virtual card payments (credit card payments that hide your actual banking information), and even international wire transfers.

But that’s not the only advantage of the platform.

Bill.com saves its clients as much as 50% of the time they used to spend paying bills through manual processes.

It stores all your invoices digitally and allows you to see and manage your invoice approvals and bill payments remotely, making it perfect for a distributed workforce.

It even integrates with major business accounting software systems, including QuickBooks, Oracle NetSuite, Sage Intacct, Xero, and more, so you won’t have to enter those bills twice.

To see how much easier (and faster) your business bills can be, start your risk-free trial today.

“Any company that’s still making bill payments the old-fashioned way really needs to get familiar with Bill.com.” — Gary Hornbeek, VP Finance, Quicken

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June 11, 2020
Mark Gervase
Director, Product Marketing, Bill.com
Mark works with accountants and finance professionals to achieve efficiency and intelligence through automation. He is a former CPA with experience in public accounting and corporate finance and has a background in helping companies use financial technology. Mark holds an MBA and BA in Economics from the University of California Berkeley.