1. How Does ACH Payment Processing Work?
You may not know the term “ACH”, but you have probably used it. If you’ve had a tax refund deposited to your account or used online bill payment, you’ve used the ACH system. ACH is a financial network within the United States that allows the electronic transfer of funds from one account to another. It has been in existence since 1974, although it has grown significantly with the use of online payments.
For example, a manufacturer delivers goods to a customer. The customer acknowledges receipt of the goods. The back-office can generate a withdrawal request for the invoice amount through VCI’s ACH processing solution. The request is sent through the financial network where it is approved, and the funds are deposited into the manufacturer’s account. It is a paperless transaction that doesn’t take days to process.
2. ACH Payment Processing Benefits
An ACH solution can reduce paper costs, lower risk, and improve profit margins while delivering a secure transaction processing solution. Let’s look at each in detail.
Have you thought about how much paper-based processes cost you? It is estimated that it costs a company $20 to file a piece of paper. When you think of the number of paper invoices issued, the number of paper checks received and the number of account statements issued, the cost of a single payment quickly adds up. With an ACH solution, paperless transactions are not only quicker, but they are also more cost-effective.
When manufacturers supply parts or raw materials to new customers, they risk delays in payment. No matter how much due diligence a company performs, there is always a chance of slow or no payment. ACH solutions can mitigate that risk by processing payments upon delivery. With VCI’s ACH solution, funds can be taken from the customer’s account and deposited into the manufacturer’s account, often on the same day. Businesses no longer have to wait for payment.
When back-office staff spend time emailing and calling customers for payment, it takes them away from more meaningful work. In an industry with low profit margins, unproductive overhead expenses only add to operating costs. If overhead savings are added to the savings from paperless transactions, manufacturers can realize improved profit margins. Not only does ACH payment processing lower manufacturing costs, but it also reduces the time customers spend in processing invoices and authorizing payments, saving them money as well.
VCI has been in the payment processing business for more than 20 years. During that time, we have helped companies to accept traditional and alternative payment methods. Our processing solutions provide tools to verify payments, prevent fraud, and recover funds. Using our Merchant Console, manufacturers have access to:
- Payment Forms
- Virtual Payment Terminal
They also have access to a PCI-compliant:
- Customer Database
- Transaction Manager
- Report Generator
These features ensure a safe and secure solution for your processing needs. If you’re interested in improving your bottom line, contact us for a free cost analysis. See what an ACH solution can do for your manufacturing business.
Call Us to Get Started