Finding ways to make your business successful takes creativity. For some small businesses, it has meant an increase in their social media presence and some endorsements with influencers to get their name out there. However, getting their name out there to increase business means nothing if they don’t have a good sending and receiving payment system. That is why more companies are using ACH payment systems in their businesses. Continue reading for a better understanding of what ACH is and seven ways ACH processing makes businesses more successful.
What is ACH?
Automated Clearing House, or ACH, is what businesses use to conduct electronic financial transactions. ACH includes credit or deposits to accounts, vendor payments, and payroll. ACH can be used to pay almost any type of bills like mortgage, car payments, utility bills, and grocery and department stores. ACH payments take away the need for consumers to carry around paper checks.
There are tons of benefits for companies that accept ACH payments. Here are seven ways ACH processing benefits companies.
Reducing Fraud Risk
When consumers write a paper check in the grocery store, it is handled by many people before it is eventually processed. Between the clerk at the cash register and the store manager preparing the deposit slip, the routing number and checking account number on that check are passed through multiple sets of hands. With innovation and technology, counterfeit checks are easy to create.
On the other hand, ACH payments are computerized on secure systems that rarely store card numbers. It is more challenging to process ACH payments that are made fraudulently.
No Deposit Delay
Before ACH payments, payroll checks would be handed out, and if employees chose to, they deposited those checks into the checking account to pay bills. For some, those checks were sent from a checking account from another state. That meant that their payroll check could take a few days to clear (or for the funds to be available to spend).
Reduces Risk of Human Error
It is no secret that writing checks, like writing anything else, isn’t always flawless. It could be simple mistakes like the date; the cents could be off, a name spelled wrong, or anything that would cause a bank to reject a check. However, ACH Processing reduces the risk of human error, causing a delay in paying or receiving money.
With ACH payments, payroll checks are processed and available for spending immediately. Also, if there is a problem with payroll and HR has to spend more money, instead of waiting for a check to be sent and then deposited and clear, the difference can be sent and available immediately.
Not only are deposits fast with ACH when an ACH is used for a purchase, but that money is also as good as cash. Payments have real-time verification, which means the money goes from one account to another in seconds, giving stores the freedom to order more materials because the money they’ve made is free and clear to spend.
Easy Recurring Payments
If your company runs off of subscriptions, your customers will appreciate the convenience of setting up a payment one time and receiving their service or product without having to do anything else. Not only do recurring payment options make it easy for customers, but businesses can also project what they have coming in the future. Also, when customers have installment payments, setting up ACH payments eases their minds regarding price due dates.
ACH is Innovative Technology
ACH technology is innovative and changing daily. Designed to make banking more efficient and faster, it benefits millions.
ACH Cuts Costs
Using ACH instead of paper checks can save them roughly 75% per pay period for a company with several reviews to write and process each payday. Companies still using checks must pay for the paper checks, envelopes, and other supplies for processing payroll. Conversely, ACH deposit receipts or records can be printed on standard white paper.
As you have read above, ACH has changed and improved how companies process payments. ACH is a benefit to consumers and to companies for a variety of reasons, and you should greatly consider incorporating it into your business.