Automated Clearing House (ACH) processing allows companies to collect payments from customers electronically using the ACH network. Using ACH processing reduces errors, speeds up the transaction process, and saves resources.
An ACH payment is simply an electronic transfer from one account to another. Because they are done electronically, ACH payments use fewer resources such as paper and ink. Also, ACH payments make it easier to reconcile finances. Instead of nonspecific information on a bank statement, the other party’s name appears on the statement. This makes it simpler to organize the transaction in financial software. Electronic payments may either be electronic from beginning to end or a paper check may be written and converted into an electronically processed transaction.
Businesses benefit from ACH processing in a variety of ways. Because the money is in their account almost immediately, companies can access the funds quickly. There is no risk of returned checks or the fees associated with them. There is no need to wait for a check that has been put in the mail to arrive and no risk of checks getting lost in the mail. ACH processing is also more cost effective than processing paper checks. ACH payments are received more quickly and more reliably and there is no need to forward checks to the bank for processing. By eliminating paper checks, the risk of check fraud is reduced
Consumers also benefit from ACH processing because they can set their payments up to run on auto-pilot. This helps to eliminate late payments and the late fees associated with them. It protects the consumer’s credit rating because payments are made on time and automatically. It saves time and money because there is no need to buy postage and write checks to put in the mail.