How To Set Up ACH Payments For Your Business

• Business Bank Account Information:  You’ll need your business bank’s routing number and your checking or savings account number.
• Customer Payment Information: To process an ACH payment, you’ll also need the payer’s bank routing and checking/savings account numbers.
• Virtual Terminal Or Web Form: To process payment for mail and telephone orders, you’ll need to enter payment information. You’ll need a web form to collect information on your online store’s sales checkout page for website payments.
• Payment Processor: If you’re taking ACH payments online, you’ll most likely need a payment gateway to transmit the data required for the ACH transaction.
• ACH Authorization Form: If customers are paying in person or through the mail rather than online, you’ll probably ask them to complete an ACH authorization form that includes the following: names and contact information for both the payer and the payee, payment details, including amount and schedule (one-time or recurring), a statement authorizing the form, and an explanation of how to cancel the agreement (including how much notice is required). Be sure to date this agreement, and add the payer’s and the payee’s signatures.

Since it’s hard to change payment behaviors, it makes sense to start new customer relationships on the right foot. That means letting new customers know that ACH is your preferred payment method.

When you onboard new customers, set that as an expectation while providing alternatives for any customers who resist.

Most accounts payable departments operate in auto-pilot mode, and they often continue doing things the way they’ve always been done. So you may have to make a little noise if you want to encourage them to adopt a new payment method.

Add a line to invoices, put a notice on your online store’s checkout page, and have your customer service team mention it to customers — particularly those who often pay invoices after their due date. Let them know that setting up ACH payments can reduce their workload and simplify the process of paying the bills.

ACH payments make sense for you, the seller. But they also make sense for your customers, particularly those who are used to paying you with paper checks or eChecks.

As a recap, when customers use ACH, their payments are:

• Less expensive
• Labor-saving
• Faster
• More secure
• Less susceptible to fraud
• Easier to track

If you have a marketing team, ask for help crafting a letter to “sell” customers on the idea of shifting to ACH payments. Don’t shy away from explaining how ACH transactions benefit your business, why ACH is your preferred payment method, and how your customers can benefit from ACH, too.

Every good salesperson knows it’s not enough to ask just one time. When you want your customers to change their behavior, you’ll need to ask many times, and in different ways, before you hear the Yes you’re hoping for.

Be prepared to follow up. Call some of your customers to make a personal pitch for using ACH. Ask your reps to explain and encourage ACH when they call on business customers and when customers call in their orders.

Make sure to time your requests right. If you ask at the end of the month, when payments are already in process, you probably won’t succeed. Asking at the beginning of the month or the beginning of the year may yield better results.

Make ACH payments an option, and more than a few customers will probably start using ACH. What about the rest? You don’t want to give up, but you also don’t want to waste too many resources chasing down customers who will never change.

Our suggestion: Look at your customer list and decide which you should target for special efforts to convert their accounts to ACH payments. It could be those customers who often pay late and require costly follow-up efforts or those whose payments are large enough that reducing their payment processing fees could make a difference for you.

Maybe it’s those customers who place the same orders every month and have the same payment amount each time. Automating their orders and payments could save you both time and money because ACH makes it easy to process recurring payments.

It shouldn’t be your go-to move. But if your customers firmly resist ACH payments, it may be worth offering them an incentive to make the switch.

Before you can offer a discount to customers who move from paper checks or credit cards, you’ll need to understand how ACH transactions affect your bottom line. Don’t give away more than you’ll realize in savings on payment processing fees.

Remember that ACH transactions can save you more than just transaction fees. You can also avoid the cost of chasing down late payments, and if your payment and accounting systems are integrated, ACH payments may be faster and less expensive to process.

An ACH discount can look different for every business, but it should be uniform for all customers or for those in similar tiers, such as B2B vs. B2C. A small discount might be a good incentive, or you may see better results with a small one-time discount.

Because using ACH benefits customers, too, you may be able to meet your ACH transaction goals with a one-time reward. Think outside the box and focus on what might motivate customers the most. It could be a charitable discount, a free gift, priority access, or something else. Don’t feel like you need to spend a lot on incentives; the key is finding the right motivation.

If you’ve done everything you can think of and you’re still not seeing enough customers start to adopt ACH as their preferred payment method, it may be time to call for help.

You could pay a consultant to offer guidance. First, we suggest you take advantage of a free offer from Nacha, the organization that governs the ACH network. You can sign up for a free 15-minute consultation from Nacha, and use your time to discuss strategies for encouraging customers to pay via ACH transaction.

Almost all US banks and credit unions are members of Nacha, the governing body of the Automated Clearing House (ACH) network, and can accept ACH payments. While it’s rare for banks outside the US to accept ACH payments, many other countries have their own automated payment networks, and Nacha coordinates with many of those.

No, ACH deposits are not available immediately. ACH transactions are batched and processed at several set times throughout the day. Once an ACH transaction is processed, you should see the funds in your account within 2-5 business days.

It’s usually free to send an ACH payment. For example, many banks offer online bill payment services at no charge. However, if you’re the one receiving an ACH payment, you’ll have to pay a small percentage or a flat fee for each transaction.

It’s easy to set up recurring ACH payment fees. You will need a recurring authorization form with information and signatures from both buyer and seller that includes bank account information, payment amount, payment frequency, and information about how to cancel the agreement. Once you provide this information to your ACH payment processor, your work is done.

Almost all merchant service providers offer ACH payment processing, either included with your account or as an optional add-on. Top names include Helcim, Square, Stripe, and Braintree.