The Benefits of ACH for Business Owners and Customers
ACH transfers are a convenient way to move money between accounts. Before electronic banking, customers and business owners had to rely on paper transactions. While we are grateful for the role that paper transactions play in the history of banking, they did increase the risks of delays and errors. These days, money can easily be moved between accounts. This is because ACH transfers have made a significant impact on the way business owners and customers experience banking. The benefits of ACH make banking more effortless than before.
What Is ACH?
An automated clearing house (ACH) is a system that gives banks a platform to facilitate payments between different accounts. Payments are made directly from one account to another with minimal delays. There are several types of ACH transactions that you may be familiar with. Here are a few examples.
Direct Deposit
You should be familiar with direct deposits if you have a bank account and a job in the 21st century. Direct deposits are transactions that are initiated by a payment institution to a payee. Direct deposits are most commonly used for payroll, tax refunds, and other types of automated payments. Once the funds are deposited into the payee’s bank account, they can use the money as they wish.
Direct Payments
Although direct payments sound a lot like direct deposits, they are entirely different. A direct payment pulls money from a customer’s account instead of putting it in. Direct payments include payments made to another institution from a customer. Some examples of direct payments include the following.
- Paying a credit card bill.
- Paying a utility bill.
- Sending money to a friend using wire transfers or Zelle.
- Moving money from a checking account to a savings account and vice versa.
The above are considered ACH payments because you will see the money leave your account with an ACH debit that shows who received the money and how much.
How Does ACH Benefit Business Owners?
The benefits of ACH are significant to business owners everywhere. It does not matter if you own a small business or a large corporation. Managing transactions has never been easier. Here are a few benefits of ACH for business owners.
More Cost-Effective
Direct transfers give business owners a cheaper alternative to paper transactions. There is less time and money spent preparing, processing, and mailing payments to employees and others. This process may cost businesses up to $20 per transaction, while the bank may charge a small fee or no fee at all for sending money between accounts.
Less Risk of Error and Fraud
Paper transactions such as checks come at high risk for error and fraud. Because they are handled by so many people before getting into the hands of the payee, ACH transactions reduce this risk because if a payment is recurring, it can be automated.
ACH transactions also do not have a lot of middlemen. Transactions can usually be directly from one person to another. This also helps to cut back on time because business owners will not have to spend time reissuing checks and fixing other errors.
Increased Growth Opportunities
If you own an up-and-coming business, implementing an ACH payment system can make your business more appealing. In the age of touchless and wireless technology, it is difficult to trust a company that still operates on an outdated system. Many larger companies and customers prefer to have electronic payment options to protect their finances from error and fraud.
Additionally, the benefits of using an ACH for growing your business include:
- Having better control over your business’s finances.
- Setting up recurring payments.
- More convenient disbursement of payroll.
How Does ACH Benefit Customers?
If you are a customer wondering how you can benefit from ACH transactions, here are a few benefits of ACH transactions for customers.
Independence and Convenience
Using ACH transactions means customers do not have to depend on others to complete their transactions. When transactions were completed on paper, customers had to send bill payments through the mail or wait in line at the bank to put money into their accounts.
ACH transactions make it possible to get paid, pay your bills, and move money around from the comfort of your electronic device.
Easier to Budget
Using ACH transfers makes it easier to budget. One of the most convenient features of an ACH is that record keeping is automated. Every dollar that comes into your account and leaves your account is recorded. This makes bookkeeping easier.
If important recurring charges are automated, you don’t have to worry about late payments and the fees associated with them.
Reduced Errors and Fraud
Similarly to business owners, ACH transactions reduce the risk of errors and fraud. Money that is owed to you is instantly deposited into your account. If there is a suspicious transaction on your account, it is easy to notice it and dispute it.
Additionally, it is easy to tell exactly where your money is going, so you will have readily accessible records to prove if something has or has not been paid.
Learn More About the Benefits of ACH With Farmers Bank!
An ACH account is highly beneficial to both business owners and customers. ACH transfers make banking super convenient. They also provide better protection against fraud and banking errors. Farmer’s Bank can assist you in setting up your account and making sure you have everything you need for quick and convenient banking. If you are a business owner, we can discuss how payments, receivables, and payroll work.
Farmers Bank has been serving customers like you since 1917. Let us help you take the right steps to ensure a successful banking experience for you and your customers. We can also help you make the best financial decisions. If you want to take control of your finances, start by calling Farmer’s Bank. Our experienced staff would be delighted to help you.
Give us a call today if you have more questions about the benefits of ACH. Click here to get in touch with Farmers Bank today!