The way your company processes its payments affects your profitability. Paper checks are a hassle for business and customers because they slow down the time for payment processing. For a cost-effective and convenient way to move money from one bank account to another, using the Automated Clearing House (ACH) Network is the way to go. The ACH Network allows people to transfer funds between two bank accounts via direct deposit or direct payment.
ACH is used for payroll, employee expense reimbursement, refunds, government benefits, interest payments and any electronic transactions via direct transfers. This type of transaction offers customers a secure and convenient way to pay for products and services, allowing your organization to attract new customers and grow the bottom line. Here are a few ways your business can benefit from ACH:
- Convenience. ACH payments are quicker and more reliable than paper checks. Instead of customers having to carry around checkbooks or sending in checks through the mail, they’ll have the option to make a one-time or recurring payment. You will also save time not waiting for mail to arrive and allocating resources to make a deposit at the bank. The convenience of eChecks eliminates payments lost in the mail and the delay in receiving a payment from a customer.
- Lower costs. Costs associated with processing a credit and debit card range between 2 to 5 percent for every transaction, while paper checks end up costing you time and labor to process. ACH transactions are approximately $1 per transaction, making it a less expensive option compared to credit and debit cards and paper checks, and saving you money on processing fees.
- Recurring Billing. If you want to get paid on time, use ACH payments. Companies that operate on a subscription or membership-based model are a great option to regularly bill your customers, especially when you run the risk of cash flow issue due to people forgetting to pay their bills. Additionally, most banks process electronic payments before paper checks. Recurring billing eliminates the time devoted to collecting monthly payments and saves on processing fees.
- Faster processing time. As mentioned earlier, most banks process electronic payments before paper checks, ensuring you’ll get paid faster. ACH payments uses fewer resources by eliminating the need for check paper, ink, postage and labor to handle and deposit checks. Your company will be able to focus on other areas of the business by streamlining accounting operations.
- Security. It’s understandable for customers to be concerned about fraud and identity theft, but ACH is a safe way to pay. All bank information provided – the same info on a paper check – is entered into a secure and encrypted system. Unlike paper checks that exchange multiple hands, bank account information entered via ACH is only exposed once and have fewer opportunities to get lost or stolen. Money moves directly from one account to another. Plus, if there are ACH errors or fraudulent activity, you’re protected under federal law.
- Reporting. ACH processors such as our system make it easier to manage your organization’s reporting requirements. You can monitor payment activity from start to finish and receive notifications throughout the entire process for real-time reporting. Reporting and reconciliation tools also allow you to see when transactions move from pending to funded to settled, drill down on details and review your transaction activity in one central location.
ACH is one of the largest, safest and most reliable payment systems in the world. It’s also here to stay. More and more customers are starting to prefer using ACH payments over credit cards because of the regularity of paying monthly bills, the elimination of paper checks and how it’s directly connected to their bank accounts. Save time and money with a system that’s convenient, safe and efficient.