ACH payments are electronic payments made through the Automated Clearing House network, a secure system for clearing electronic payments between banks. Managed by NACHA (the National Automated Clearing House Association), the network is much quicker than paper checks, which can never travel faster than the speed of mail.
How does ACH payment processing work?
Any electronic transfer of funds from one bank account to another can be made through ACH. Direct Deposit via ACH and Direct Debit via ACH are simple, safe, convenient, and cost-effective electronic payments options that businesses of all sizes can utilize to make and receive payments. Learn more about the process at www.electronicpayments.nacha.org.
ACH payment volume grew to over 23 billion transactions in 2018, marking the fourth consecutive year in which the ACH network added more than 1 billion new payments. This payment system is so popular because of its many benefits. Using electronic payments helps reduce errors; saves valuable resources like paper, ink and truck fuel; and provides much greater security than using paper checks. Electronic payments are received quickly and reliably, and there’s no time wasted getting checks to the bank and waiting for them to be deposited to your account (or bounced). ACH payments can be accepted remotely, like credit card payments, and are generally cheaper to process than card payments.
No wonder more and more businesses are making the move to electronic payment options.
Is ACH payment safe?
ACH payments date back to 1974 when several financial organizations banded together to create regulations, standards, and security for these types of money transfers. Today, the federally regulated network is overseen by NACHA. The non-profit organization enforces a strict set of controls and procedures for all parties using ACH payments.
Three reasons why you should care about ACH payments
-
ACH as a payment solution is great for your cash flow.
When you pay with a credit card or paper check, it can take anywhere between a week to 30 days for that payment to actually leave your bank account. In the meantime, you’re juggling cash flow and trying to remember what will hit when.
With an ACH transfer, the debit is reflected on your account immediately. There’s no guessing game. You can schedule ACH transfers for specific dates or as recurring payments so you know exactly when that payment will hit.
Accounts receivable loves ACH payments. Your customers authorize your company to deduct an amount from their bank account. Within a day or two, that money lands in your organization’s account. You don’t have to wait for them to mail a paper check or hassle them to pay. The best ACH scenario revolves around recurring customer payments. On a set date, your business will automatically have customer payments in your account. It’s perfect for your cash flow.
-
ACH transfers are easy on the wallet.
When compared to other means of payments, ACHs are gentle on the budget.
Credit cards charge you to use them—either you pay in transaction processing fees if you’re collecting money or you risk interest rates if you use them for payments.
Paper checks cost the most to use when you factor in the time, supplies, and bank fees. While an ACH payment can run you 49 cents, a check costs $5 or more to get out the door. If you process 20 checks a month, you’re out $1200 a year. If you went the route of ACH payments, it’d cost about $118.
-
Customers like ACH transfers.
ACH payments are secure and convenient. Customers are familiar with them. They use them for regular transactions such as paying utility bills and accepting direct deposits from employers. By powering your AR with the ability to accept ACH payments, you’re giving your customers an option they might prefer over other payment methods. After all, you want to keep it easy for them to pay your business.
Accounts Payable — Sending ACH payments is automatic with Bill.com
Bill.com makes it simple and easy to pay bills and get paid electronically. When you schedule payments in Bill.com, our system automatically sends ACH payments to any vendor you’ve set up for electronic payment. And setting up your vendors is simple and easy, too.
There's a good chance your vendor is already in our database. If so, setting them up for ACH payments will only take a few steps. If they aren’t included yet, you simply need to invite them to join the Bill.com Payment Network.
After that, you never have to think about it again. Just one more reason to choose Bill.com for accounts payable automation.
Accounts Receivable — Get paid faster with Bill.com ACH payments
Bill.com gives your customers a choice of three easy ways to pay you online — by credit card, PayPal, or electronic ACH payment.
Bill.com ACH payments are the cheapest, most convenient way to get paid electronically. There’s no set-up charge — it’s part of the package when you choose Bill.com for accounts receivable automation.
- Get paid 2x faster — payment goes straight into your bank account
- Set up one-time or recurring payments
- AutoPay gets you paid on time every month — automatically
- No manual entry — payments are automatically applied to your invoices
- Automatic reminders — send out scheduled reminders before payments is due or send out overdue notices automatically
- Flat fee of $0.49 per payment
Learn how Bill.com helps small and mid-sized businesses automate their accounts receivable and accounts payable with ACH payments, and take advantage of the benefits for your own business. Fill out the form below to start a risk-free trial of Bill.com today.
