As a business owner, accepting ACH payments can streamline your payment processing and reduce transaction costs with suppliers, allowing you to put that money back into your operations.
Paying your suppliers is also a critical part of maintaining good relationships and keeping your business operations running smoothly. In fact, many companies have already adopted ACH payment for their supplier payments, with positive results. For example, a well-known restaurant chain in the US recently switched to using ACH payment for their food and beverage suppliers, reducing payment processing time by up to 75%.
What is ACH Payment?
Automate Clearing House (ACH) payments are a secure and convenient way to transfer money electronically between two parties. They are increasingly becoming the preferred payment method for businesses, consumers, and financial institutions alike.
Benefits of Using ACH Payments for Businesses
Businesses today must juggle many tasks to remain competitive in an ever-changing market. One of the most important tools businesses have available to them is the use of ACH payment.
Sending and receiving electronic payments is rarely as simple as it seems. Whether incoming or outgoing, payments may be slow, come with unexpected costs, susceptible to fraud, or just difficult to execute. Usually, paper is the culprit. The good news is an ACH payment network is a pervasive paperless problem solver for your business.
Business can use ACH payment to pay their employees’ wages, benefits, and reimbursement claims. This method can also be used to collect payments from customers for goods and services provided. Last but certainly not least, accounts payable teams often rely on this method as a simple and reliable way to pay vendors on time.
How Payment Processing Software Can Streamline Your Business
For any business that handles large volumes of payments, an ACH payment processing software can be a great way to streamline the payment process and make the entire process much more efficient. Payment processing software providers offer you the ability to accept ACH payments online. Accounts payable solutions like AvidXchange automate your entire accounts payable process from the moment an invoice is received to its final approval and eventual payment.
Our solution ensures that the payment processing time is kept to a minimum by eliminating the amount of paperwork and manual labor your team used to spend every day. As one of the premier providers of business-to-business ACH services, AvidXchange also possesses in-depth market expertise across multiple industries to help make your accounts payable team more agile, efficient, and scalable. As technology has advanced over the years, so too have the services AvidXchange offers to provide the B2B payment methods preferred by middle-market companies.
The Setup Process
Growing a business can be an exciting and daunting process. One of the primary tasks you’ll need to take care of when scaling your business is setting up ACH payment processing. One of the most efficient ways to collect payments from customers is to use ACH Payments. To set up, you can follow these general steps:
Step One: Choose a Payment Processor
Choose a payment processor that offers ACH payment services for businesses. Some popular options include Stripe, PayPal, and Square.
Step Two: Provide Required Information
Provide the payment processor with the necessary information to set up ACH payments for your business. This typically includes your business’s bank account and routing numbers, your business name, address, and tax identification number, and any other required information.
Step Three: Set Up Your Payment Gateway
Set up your payment gateway to process ACH payments. This may involve integrating the payment processor’s software with your website or e-commerce platform.
Step Four: Create Payment Forms
Create payment forms that allow customers to enter their payment information, including their bank account and routing numbers, and the amount to be paid.
Step Five: Test Your System
Test your ACH payment system to ensure it’s working correctly. Process a few test payments to ensure that funds are being transferred correctly and that your payment gateway is functioning properly.
Step Six: Promote Your NEW Option
Promote your new payment option to customers by adding it to your website, sending out emails or newsletters, or including it on customer invoices.
How to Make an ACH Payment
To make an ACH payment, you can follow these general steps:
- Obtain Payment Information: You’ll need to obtain the necessary payment information from the payee, which typically includes their bank account number, routing number, and the amount to be paid.
- Set Up the Payment: You can typically set up the ACH payment through your bank’s online banking system or a third-party payment processor. Follow the prompts to enter the required information, including the payee’s bank account and routing number, the amount you want to pay, and any other required details, such as a memo or reference number.
- Confirm the Payment: Review the payment details to ensure everything is correct, including the payee’s information and the amount to be paid. Confirm the payment and wait for confirmation that it has been processed.
- Wait for the Payment to Clear: payments typically take one to two business days to clear, so it may take some time for the payee to receive the funds.
It’s important to note that some banks or payment processors may have specific requirements or limitations for ACH payments, so be sure to review any terms and conditions before initiating a payment. Additionally, there may be fees associated with ACH payments, depending on your bank’s policies and the type of payment you’re making. Be sure to review any fees before initiating the payment to avoid unexpected charges.