Small business owners learn how to process ACH payments for a variety of reasons. As a business owner looking for a way to safely make and receive payments, you should be aware of these reasons. Unlike paper checks, Automated Clearing House transactions occur electronically. Since transactions occur online, the option is much safer than paper transactions. You can save time and money with ACH payments, making it much easier to meet supplier and consumer demands. ACH payments even make sending money overseas much simpler. Continue reading to learn how to process ACH payments for small businesses.
Open An ACH Account
Before learning how to process ACH payments, you need to open an ACH account. To do so, first check to see if your bank runs ACH payments. If it does not, look for a payment processor that does. You need to find a provider that allows you to make an online currency exchange easily to benefit from your account. These steps are crucial because the NACHA does not set small businesses up for ACH payments. Thus, you have to take matters into your own hands and find a provider. Search for one that allows you to accept payments anywhere, on multiple devices. That way, you can initiate transfers immediately and reap all of the benefits of ACH payments for small businesses.
Share Bank Account Information
The next step to process ACH payments is to share bank account information. If you are the entity requesting payment for your products and/or services, you must request each customer’s bank account information. Similarly, if you wish to pay your supplier, you need their bank account information as well. If your supplier uses ACH transactions, they may request your information as well. Such information consists of the bank’s ABA routing number, the type of bank account, and the recipient’s account number. Once you share this information, you are one step closer to knowing how to process ACH payments.
Enter Customer Contacts
To proceed, you must enter your customer contacts into your customer management portal. If you do not have a customer management portal, find a software system that can provide you with one. Without a portal, you cannot effectively keep track of your company’s finances. To optimize your tracking, manage an accounting system as well. Once you have your systems in place, you can enter each new customer’s information in one of two ways. Firstly, you can process a payment. Secondly, you can import your customer information from elsewhere if your portal allows it. Then, your customer data will all be stored in one place for easier ACH payment processing.
Initiate The Transaction
There are three ways to process ACH payments after you have all of the information you need. When small business owners receive paper checks in-person, they prefer to use a check scanner. By using one, you can transform your paper check into a digital ACH transaction. Small business owners who receive payments via phone and mail order can also transform their payments into digital ones. To do so, use a virtual terminal to put the account information into a computer. The last option is website payments. While this option is sometimes frowned upon by customers for safety reasons, it is worth convincing them. If your customers agree to putting their account information in during the checkout process, you spend less money than you would with other website payment options. Use these ways to initiate the transaction process for your ACH payments.
Wait For Delivery
The final step to processing ACH payments is to wait for delivery. Unfortunately, some ACH payment plans entail waiting multiple days for transactions to be completed. The reasoning behind this is that ACH transfers are not processed the same way wire transfers are. They require a network operator to process them. Those network operators only process groups of ACH payments three times each day. However, there are opportunities to expedite the process. Some providers offer delivery within 1-2 business days. Once you learn to patiently wait for payment delivery, you will know how to process ACH payments for your small business.
As a small business owner, you can benefit from using ACH transactions. However, you must learn how to process ACH payments to gain the advantages. First, open an ACH account with a bank or another provider. Then, share bank account information with appropriate parties. Enter your customers’ contacts into your customer management portal for easy access and quick processes. Choose the appropriate way to initiate your transactions based on how payments are made to you. Finally, wait for the payments to be delivered. Now, you know how to process ACH payments for small businesses.