Do you know why you should use ACH to help your business save time and get paid more quickly? In this blog post we share several reasons why a business may benefit from using ACH.
- ACH payments are quicker, more reliable and more cost-effective than personal checks. When a customer pays by check, the business must wait for the mail to come, then deposit the check in the bank. A check can get lost in the mail or bounce. An electronic payment is faster and more reliable.
- Compared with a credit card payment, an ACH transfer is less expensive. An ACH payment can cost a business between 15 cents and 95 cents per transaction, depending on the volume of transactions, the relationship between the business and its ACH vendor, and the perceived risk. Credit card payments are much more expensive.
- Since they are electronic, ACH payments use fewer resources (paper, ink, fuel to transport checks, time and labor to handle and deposit checks, and so on).
- Electronic transactions make it easier for a business to keep track of its finances. Instead of seeing generic check information on a bank statement, the business owner or employee will see the payee’s name on the ACH statement. This makes it easier to sort or categorize transactions with the company’s financial software.
- ACH transactions can make it more likely that a business will be paid. Most banks process electronic payments before they process paper checks. If a customer has $2,400 in a checking account and a business submits a $1,500 ACH transaction for her at the same time that another business tries to deposit a $1,500 paper check, the bank will pay the first business, and the other business will get a bounced check.
- There is more certainty of payment with ACH transactions for another reason. Credit card charges can be disputed by a consumer for many reasons, while ACH transactions, under the law, can only be disputed for three reasons: The transaction was not for the exact amount authorized, it was processed earlier than the authorized date, or it was not authorized at all. This means that a business is more likely to be paid when using an ACH transaction.