Automated Clearing House, or ACH, payment is a widely used, computer-based way to receive payments. ACH payment companies allow you to receive multiple types of payments, from recurring payment to cross-border payments. Learn ACH key terms to discover what features your company needs in ACH payments. When shopping for an ACH there are some key terms you may need to review. These key terms are words or phrases commonly used by ACH payment companies to describe their services.

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Electronically cleared payment

With an electronically cleared payment, the available funds are verified immediately to ensure the payment clears the bank. These payments are conducted through a federal reserve by way of a another bank.

I recommend: CBS Interactive provides more information about electronically cleared payments and automated clearing houses.

Electronic payment processing

Electronic payment processing is when credit cards and other payments are accepted over the Internet. Electronic payment processing companies handle all the charges and payments, and deposit payments into your bank account.

I recommend: West Wind Technologies supplies a detailed description about how electronic payment processing works. Read more about electronic payment processing at Vertical Web Media.

Disbursement

A disbursement is the payment of a cash or check to reimburse an employee or client. A disbursement can also be used to pay a number of other bills. Disbursements through ACHs can also be included in payroll.

I recommend: Read more about disbursements at DefenseLINK. HJ Ventures provides more information about disbursements.

Recurring payment

A recurring payment is a regular payment, such as an electric bill, insurance or other bill that is paid in a specific interval. Recurring payments are normally a set amount, but fluctuating amounts can also be considered recurring payments.

I recommend: AllBusiness.com provides detailed information about recurring payments. Find descriptions of recurring payments at SAP.

Payment collection

Payment collection is a service offered by many ACH companies. With payment collection, the hired company handles all late or non-payment problems that your company might have.

I recommend: Drishti provides more information about payment collection services.

ACH cross-border transfers

ACH cross-border transfers include when a company handles international transactions for you. This includes special charges and exchange rates. Cross-border transfers often allow you to receive the money faster than any other international transfer option.

I recommend: Visit Bnet to discover more about ACH cross-border transfers. Federal Reserve Banks provides information available on cross-border ACH services.

Automated Clearing House or ACH payment is one of the most widely used forms of payment in the United States. An ACH bank payment is a computer-based method for electronically clearing payments and deposits.

Using ACH payment options will allow you to not only provide a convenient service to your customers, but also manage internal processes such as direct deposit payroll and bank deposits. An ACH payment provider will generally offer quick and secure electronic payment processing as well as ACH payment information on credits and debits that is presented in an easy-to-read standard format. Consider the following benefits of an ACH payment to determine if this service would be of value to your business:

1. Prevent late payments with pre-scheduled ACH payment debits.

2. Save time with an ACH bank payment by avoiding frequent trips to the bank.

3. Find ACH payment service providers for your business.

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Manage internal payroll and bill payments easily with ACH payment services

ACH payment disbursements allow business owners to control funds and electronically manage internal bill payment and payroll through direct deposit ACH payment. These services save business owners time and money.

I recommend: With ACH payment services from Fifth Third, business owners can easily and cost-effectively manage vendor, employee and customer transactions electronically. Wachovia offers services to allow small business owners to transfer funds and process electronic payments online.

Accept ACH electronic payments to benefit your customers

In addition to ACH disbursements, ACH payment services can also include ACH payment collections. ACH payment collections allow businesses to reduce errors by automating check transactions between vendors and customers.

I recommend: Check out services offered by ACH Payment Solutions which allows businesses to accept and process an ACH electronic payment from anyone in any location. PaySimple is an ACH payment provider that offers low-cost, secure electronic payment services which includes automatic customer billing, e-mail invoices, online payments and training and support.

Benefit from secure, quick processing offered by ACH payment providers

ACH payment services are popular and are offered by a range of banks, ACH providers and other financial institutions. If you decide not to enroll in services offered by a major U.S. bank, be sure to thoroughly research the company background, rates, longevity and rate of accuracy in processing electronic payments before choosing an ACH provider.

I recommend: KeyBank allows commercial clients to sign up for ACH payment service, which is offered at no additional cost, via its website. Comerica offers ACH payment solutions allowing business owners to conduct debits and credits for a range of business and customer transactions. Comerica also offers cross-border transfers to Canada.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  In addition to managing payroll and customer and vendor transactions, ACH payment services can also be used to gain greater control of tax payments and expense reimbursements.