Previous | Unretirement Next | Mortgage tips for first time home buyers
June 02, 2022 / F&M Trust
How Your Business Can Benefit From ACH Payments

How Your Business Can Benefit From ACH Payments

Of all the necessary functions a business must perform each day, few are more costly or inefficient than handling paper transactions – processing, posting, printing, mailing, and tracking checks. To make matters worse, businesses then must contend with the delays, risks, and errors involved in sending and receiving checks. With paper transactions, businesses must expend significant resources just to keep cash coming in and going out.

However, at a time when money can move automatically or at will at digital speed, there is no need for businesses to deal with such mundane but demanding processes. By using electronic payments through the Automated Clearing House, that can all go away, allowing cash to flow in and out of the business more efficiently.

What is ACH and How Does it Work?

The Automated Clearing House is a vast, digital network connecting financial institutions across the country and the globe. It creates a single platform providing banks with the capacity to transfer funds to and from other banks and their customers. Banks or businesses can access the network to push or pull funds at their request with a one- to two-day settlement timeframe.

When a business accesses ACH to pay a vendor, it makes an entry into the ACH system. The amount requested is then debited from the business’s account by its bank, which then transmits the payment through the ACH network. The vendor is notified of the transfer by its bank, which then credits its bank account. The vendor receives notice of the credit, which may not be available for a day or two.

Vendors can also initiate the process by requesting that a payment be pulled from a business’s account with its authorization.

The Advantages of ACH for Businesses

  • Lower processing and transaction costs: Considering that businesses can spend up to $20 for a paper transaction – including preparing, printing, mailing, and tracking – processing payments through ACH can reduce transaction costs significantly.
  • Reduced incidences of error and fraud: A check transaction typically involves handling by several people, increasing the possibilities of error or fraud. ACH transactions can be controlled by as few as one person on each side of the transaction.
  • Faster payments: Transaction times are reduced by days, even weeks.
  • More efficient payables management: Payments can be more easily batched and scheduled to optimize cash on hand.
  • Automated recordkeeping: Transactions are automatically recorded, compiled, and reported. In most cases, records can be downloaded into a business’ accounting system.
  • Increased revenue growthopportunities: Many larger companies and government entities prefer working with partners who accept ACH payments. Younger consumers tend to prefer electronic payment options.

Other Benefits of Using ACH include:

  • Gain more control over your daily cash flow
  • Streamline the disbursement process
  • Improve cash flow forecasting
  • Set up recurring payments
  • Eliminate mail float
  • Streamline reconciliation

Establishing an ACH Account

An ACH account can be set up in a matter of hours. The first step is to contact your bank, F&M Trust at 888-264-6116, and discuss your transaction needs, including payments, receivables, and payroll. Business banks are fully equipped to offer state-of-the-art ACH along with a full range of cash-management services that can be tailored to your needs and budget.

Recent Articles
Mortgage tips for first time home buyers
Mortgage tips for first time home buyers

Mortgage tips for first time home buyers

January 25, 2023 / David Kuhns

Charitable Giving; A donor-advised fund offers tax benefits
Charitable Giving; A donor-advised fund offers tax benefits

Charitable Giving; A donor-advised fund offers tax benefits

January 20, 2023 / The Merrill Anderson Company

Why entrepreneurs find it hard to ask for help
Why entrepreneurs find it hard to ask for help

Why entrepreneurs find it hard to ask for help

January 16, 2023 / Patti Murray

Why the IRS is still catching up
Why the IRS is still catching up

Why the IRS is still catching up

January 06, 2023 / The Merrill Anderson Company

Lease vs Buy: Which is Better for My Business?
Lease vs Buy: Which is Better for My Business?

Lease vs Buy: Which is Better for My Business?

December 22, 2022 / Jeramy Culler

Stabilizing Your Business' Cash Flow
Stabilizing Your Business' Cash Flow

Stabilizing Your Business' Cash Flow

December 15, 2022 / Jeramy Culler

Social Security COLA Increase is Biggest Since 1981
Social Security COLA Increase is Biggest Since 1981

Social Security COLA Increase is Biggest Since 1981

December 08, 2022 / The Merrill Anderson Company

How to Protect Yourself After a Data Breach
How to Protect Yourself After a Data Breach

How to Protect Yourself After a Data Breach

December 01, 2022 / Ray Wills

Protecting Your Business Debit Card
Protecting Your Business Debit Card

Protecting Your Business Debit Card

November 24, 2022 / Ray Wills

Join our e-newsletter

Sign up for our e-newsletter to get new content each month.

NOTICE: YOU ARE LEAVING F&M TRUST!

You are now leaving the F&M Trust website. Links to third-party sites are provided for your convenience. Such sites are not within our control and may not follow the same privacy, security or accessibility standards as ours. F&M Trust neither endorses nor guarantees offerings of the third-party providers, nor is F&M Trust responsible for the security, content or availability of third-party sites, their partners or advertisers.