Four Benefits of ACH Payments for your Business

These days, businesses rely on speed in order to work efficiency. Time is money, which means any unnecessary roundabout can cost a company dearly while giving their competitors a clear advantage.

imagesIn recent years, the accounts payable industry has made major advancements when it comes to automation.  This is especially true with automated clearing house payments, or ACH payments. The ACH is an electronic network of financial transactions in the United States which allows banks and other financial institutions to quickly clear electronic payments. This network is governed by the National Automated Clearing House Association (NACHA), which means making transactions is faster, cheaper and more secure than processing paper checks individually.

Though ACH payments work more efficiently for everyone, it is crucial that businesses adopt this service if they already haven’t. Here are four benefits of ACH payments:


Paper invoices, paper checks and paper record lead to the possibility of fraud and mistakes, especially in the business world. According to the Federal Trade Commission, nearly 9 million Americans are affected by identity theft each year, of which 85 percent results from the thief taking personal information from the victim’s paper check, bank statement or credit card bill. Because ACH payments occur electronically, this reduces the number of individuals who have access to personal financial information. Furthermore, ACH payments cannot be lost or misplaced, and automatic records make tracking easy.

Access to funds

Whereas paper checks can take several days to process, ACH payments typically show up immediately. Furthermore, with paper checks, financial institutions may hold funds for up to five business days for checks drawn out of state banks before giving them to the depositor. They may also hold personal checks for up to two business days. ACH payments bypass this holding, which makes recording transfers much easier.


According to the Office of the Comptroller of the Currency a paper check transaction costs up to five times as much to process than an ACH transaction. Since 2002, the number of electronic transactions has far surpassed paper transactions, which means that while paper transactions remain costly, electronic payments are only going to get cheaper.


Traditional payment processing is a labor-intensive process that involves a large amount of unnecessary work for your employees. Rather than creating and mailing checks, employees can actually focus on their job and reduce the risk of a mishap, which will only add to the headache. With a client, instead of a monthly payment, ACH payments only need to be authorized once, prior to the first transaction. Businesses just need to set up direct payment for their clients, which eliminates the hassle of having to pick up a check and deposit it at the bank each months. It also enables businesses and individuals to work remotely.

Overall, ACH payments, like other automated services, make life easier for every party involved. It’s cheaper, easier and more efficient than more antiquated means, which are quickly becoming outdated. If your business still uses paper transactions, it will also become antiquated.


This guest post was written by Flynn Zaiger. As a business professional in the New Orleans area, he’s taken a particular interest in finding the most business friendly of the Metairie Banks. The views expressed herein are those of the author and not necessarily those of any financial institution or bank. This article is intended to provide those reading it with information about matters of current interest. It should not be construed as legal or financial advice concerning a specific topic and should not be acted upon without contacting the appropriate professionals.