ACH (Automated Clearing House) is a nationwide computer-based network that electronically processes financial transactions between participating institutions. ACH optimizes your resources by transforming traditional payments via check issuance and facilitates expedited collection of payments. ACH not only keeps processing simple, but also reduces costs, manages risk and helps improve employee and customer satisfaction.
Using ACH promotes a streamlined workflow. ACH can eliminate the costly and tedious process of issuing checks. Instead, you can initiate electronic transactions through the ACH network, disbursing funds to your vendors’ accounts.
Using ACH allows you to exert greater control over cash flow. With ACH you can control the timing of disbursements and improve cash forecasting. You always know exactly when your account will be debited and can manage it based on your business needs.
ACH eliminates the need to reimburse employees for business expenses. When authorized employees use ACH, their purchases are automatically deducted right from your business checking account. You get a detailed record of every transaction and remove the extra paperwork and time previously required to do so.
A research study conducted by NACHA and FIS found that many small businesses don’t offer ACH direct deposit for payroll to their employees because they think they are too small or they think it is too expensive. If your small business doesn’t yet offer ACH direct deposit for payroll, you should seriously consider it.
You could save between $150 and $300 annually per employee, and you will be making your employees’ lives easier by not forcing them to go to the bank to deposit paychecks. In fact, over 86 percent of employees and employers view direct deposit favorably.
Additional benefits of using ACH:
- Expedite and automate the collection of your receivables
- Make payments faster than issuing and mailing a check
- Use exact settlement dates to negotiate payment terms with vendors
- Reduce the risk of fraud by eliminating check issuance
- Send credits domestically
Not only can using ACH result in your business getting paid faster, moving to electronic payment processing saves money on transactions processed (vs. paper checks and credit card payments) as well as reducing the work involved for accounts payable and accounts receivable functions.
Still not sure of the benefits? Use this calculator provided by NACHA for Direct Payment (for vendors) or Direct Deposit (for employees) and then contact us to learn about a customized ACH program for your business. Contact us directly at VeriCheck for more information and assistance.