Businesses have gradually been moving away from paper-based payments like checks to electronic payments like ACH (Automated Clearing House) for years.
Here are five benefits of ACH payments and the reasons why your business should consider making the transition if you haven’t already.
ACH payments are more efficient than paper-based methods. The ACH payment system is a computer-based network, which means it allows for a transfer of funds directly between bank accounts on a scheduled date. It’s fast and it can be automated, making it less hands-on for your accounting team. Direct deposits to employees, payments to suppliers and other regular transactions can all be scheduled.
ACH transactions are less expensive than alternatives. The cost of processing an ACH transaction is much lower than checks mailed with postage. Additionally, the expense of initially implementing an ACH payment system for your business is low with few up-front costs.
Since ACH transactions are made online, you have control over when you make payments and when they are processed. This control and flexibility over when you make payments enables you to manage your business’s cash flow more efficiently while providing more security controls over who can process and approve transactions.
Checks can be intercepted in the mail, forged and cashed in by scammers. ACH payments, on the other hand, are sent and stored securely online and have a reduced likelihood of administrative error since several individuals often review ACH payments before they are sent.
Preparation for the unexpected
Back in 2020, many businesses using paper-based methods at the start of the pandemic rushed to transition to an ACH system when they were already overloaded with other changes and stressors. Be sure your business is prepared to efficiently and effectively continue making payments during a crisis.
Implementing payment efficiencies now will help your business, employees and vendors avoid disruptions and be better prepared for the future.