ACH Best Practices for Businesses

ACH payment processing is a great option for businesses of all sizes and industries. But the success and security of ACH transactions start with your business operations.

In the 5 years since Same Day ACH was launched, this payment processor has made waves for businesses of all sizes, and the growth is expected to continue.

Here are some ACH best practices for small and medium-sized businesses.

Uses for ACH Payments

Part of the appeal of ACH payments includes ease of use and digital convenience. The only businesses that won’t benefit much from implementing ACH solutions are those that do the vast majority of their business in person and/or at a specific store location.

Everyone else can benefit from ACH. Let’s look at some great ways you can use ReliaFund’s ACH services in your small and medium-sized business operations.

First, ACH payments are perfect for recurring payments. If your business is based on (or simply has a line of products or services) a subscription or membership model, you can keep your processing fees low by setting those payments up in the ACH system. These recurring payments can also be used to collect rent if you are a rental property owner.

If your business isn’t using subscriptions or memberships to gain revenue, you can also use ACH for single payments of invoices. This is especially important if your services or products have a high price. For example, a furniture store may use ACH to collect the payment for a $7,500 bedroom suite for a customer whose credit card has a $5,000 limit.

Capitalize on the Pros of ACH Payments

Small and medium-sized businesses know they must capture market share creatively to ensure they don’t get placed in the shadow of bigger businesses and corporations. This is the same mindset with which you should approach your ACH payments strategies.

There are tons of ACH best practices, as well as pros and cons of using this payment type. This begs the question: how can we increase the impact of the pros of ACH and decrease the impact of the cons?

Let’s start with the pros. Some of the biggest benefits of ACH are the lower fees, the ability to reach customers even if they don’t have a credit card, and the lack of expiration dates.

When it comes to fees, ACH is more straightforward than most credit and debit card processing. Many payment processors will charge you a percentage of the total sale or invoice amount (generally something around 3-4%) plus a fee (30 cents to a dollar or more) for online credit card payments. And if you are using sites like Etsy (which has its own payment processing services), you will have to reconcile all of your fees for all the processors you do business with and through every day.

However, for ACH payments, your bank or payment provider will typically set this fee. It is often close to a $1 charge with a $1 minimum transaction fee.

The second pro of ACH is the ability to reach people who don’t have credit cards. 17% of U.S. adults don’t have a credit card, but only 5% don’t have a bank account.

Expiration dates are frustrating, though often necessary. But we now live in a world full of auto-pay, and those credit card expiration dates can cause friction and failed payments when a recurring invoice or funds request goes out just after a customer’s card has expired and before they’ve had time to input the details of their new card into their account at your business.

ACH doesn’t have expiration dates. So long as the bank accounts connected to the transfers are active, you’re good to go, forever.

Mitigate the Cons of ACH Payments

Everything that has benefits also has disadvantages. Another of our favorite ACH best practices (and payment processing practices in general) is to mitigate the cons.

Common ACH payment cons include difficulty remembering account details and insufficient funds issues.

Because your ACH payment requires bank account information, it’s sometimes more tedious for a customer to recall or find that information when they are at your business, shopping online after their bank hours are closed, or if they don’t have online access to their accounts.

There are a few ways to remedy this issue. The first is to encourage your customers to have or be able to access these details before they initiate a transaction with you. You can use your business website or social media accounts to encourage this.

The second is to offer assistance or education on where and how to find this information. And the third is to use an integrated payment platform like ReliaFund so you can quickly check your transactions and notify your customers when there is a problem with their ACH information.

Another main con of the ACH payment system is the prevalence of insufficient funds issues. Unlike credit cards, ACH isn’t a payment tool that allows the customer to carry a balance. If your client doesn’t have the funds available to cover the entirety of the ACH request, this can lead to overdraft fees or other insufficient funds penalties.

Your business can help combat that by sending reminders for recurring payments and being transparent about when and how funds will be moved from the customer’s account to yours. You can also set up those recurring payments to happen on the same day and time of the month, which helps eliminate confusion.

For example, Amazon Prime members receive a reminder notice 3 days before their account is charged for the next year of services. You can increase this time to a few weeks, or even send multiple reminders. By helping your customer know when to anticipate a payment will be pulled from their bank funds, you can reduce the effect of overdraft and insufficient funds fees they will incur.

This also helps you build brand trust!

ACH for SMBs, Simplified

Another top ACH best practice is partnering with a provider that not only has the tools and skills to help your small or medium-sized business thrive in your industry but also wants to be a true partner in your company – helping to support your needs with the ReliaFund ACH services and payment platform.

ReliaFund is here to help you:

  • Boost efficiency
  • Get paid faster
  • Lower costs
  • Collect and disburse funds
  • Set up recurring billing
  • Accept payments online or by phone

For more information on our services, call us today or send us an email.

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ACH Best Practices for Businesses