3 min read

The Benefits of Switching to ACH Payments

The Benefits of Switching to ACH Payments

The COVID-19 pandemic accelerated many businesses to implement practices they had been working toward for years, such as remote work, automation and the need to make payments remotely through ACH (Automated Clearing House), a form of electronic payment.

While businesses have been moving away from paper-based payments, such as checks, to ACH payments for years, the pandemic has spurred many others to follow suit. The transition has allowed businesses to continue paying their employees and vendors despite most work going virtual.

If your business is still using paper-based methods for its payables, here are five benefits of ACH payments and why your business should consider making the transition.

Efficiency

In addition to experiencing less disruption, 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.

Savings

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.

Control

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.

Security

Checks can be intercepted in the mail, forged and cashed in by a fraudster. 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 future unforeseen events

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. If anything has been learned from this year’s events, it’s to be prepared for anything, and that includes ways to efficiently and effectively continue making payments during a crisis.

Getting ahead and implementing payment efficiencies now will better prepare you for future unforeseen events so your business, employees and vendors experience less disruption. Take some time to evaluate how your payment system has worked for your business since the pandemic started, and ask yourself “How can I better prepare for the next crisis?”

Next steps:

  1. Read more of our Business content, including this article on the impact of COVID-19 on globalization.
  2. To learn more about implementing an ACH payment system for your business, contact my Bankers Trust Treasury Management
  3. Subscribe to our e-newsletter.
Kevin Tiernan

Kevin Tiernan

VP, Treasury Management/Global Banking Sales Manager (515) 246-3330 Email Kevin

Kevin Tiernan serves as VP, Treasury Management/Global Banking Sales Manager at Bankers Trust. He has nearly 15 years of banking experience in treasury management and retail banking. After earning his bachelor’s degree from Iowa State University, Kevin went on to earn his MBA from the University of Iowa. He also completed the Graduate School of Banking program at University of Wisconsin. Prior to joining Bankers Trust in 2011, Kevin worked at Wells Fargo for four years. Kevin has been recognized for his involvement in the community and career achievements. Most recently, he was recognized in the Business Record’s Forty Under Forty in 2015. He was also recognized as an Up and Coming Banker in 2014 by Community Bankers of Iowa, and he received the Governor’s Volunteer award in 2012. Apart from his position with Bankers Trust, Kevin serves on the board of directors of Balance Autism – an organization that provides care and innovative therapy for those living with autism. In his free time, Kevin likes to travel, attend live music concerts and festivals, and ride his bike on Iowa’s beautiful trails.

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