Basics of ACH Processing
ACH processing allows you to use the Automated Clearing House (ACH) Network to collect payments. To learn the basics of ACH, see:
Good News about ACH Processing
Businesses benefit from ACH processing in several ways:
Payments are credited to your account immediately, so you don’t need to send (or drive, or walk) checks to the bank.
You’ll see fewer errors with ACH processing. Once it’s set up correctly for a client, it’s likely to work going forward. Every time your customer writes a check and drops it in the mail, any number of things can go wrong.
You can automate attempts to collect bad checks. ACH processing services often include this as part of their service, so you don’t have to deal with the same check twice.
Bad News about ACH Processing
If you hadn’t guessed, ACH processing isn’t free. You have to pay setup costs, and you’ll pay a fee per transaction. Given the benefits, it’s probably worth the cost, but ACH processing might not be an option for cash-strapped businesses.
Money is not necessarily available for withdrawal immediately. Using ACH processing is different from receiving a bank wire transfer. If you need cleared funds quickly, demand a wire transfer.
You might not end up getting paid. Even if you get a payment through your ACH processing system, your customer’s bank might pull the money back. The customer may not have funds to cover the purchase, or they may dispute the charge. Again, you don’t receive cleared funds so you have to wait for the banks to settle the transaction.