In a world where innovation in payment methods is moving faster than ever, the U.S. has lagged behind, with many companies still relying on paper checks. This creates inefficiencies, delays, and even errors in processing.
With Gravity Software’s new ACH payment processing feature, in partnership with Checkbook.io, paying vendors just got a lot easier. Gravity Software users can now make payments in the U.S. and Canada without third-party payment processors like Bill.com.
Here’s a closer look at the benefits of ACH payments and how they work.
What are ACH payments?
ACH (Automated Clearing House) payments are electronic funds transfers between bank accounts, utilizing a network of financial institutions to process these transfers in batches. This makes them one of the most efficient ways to manage business payments, eliminating the need for paper checks, wire transfers from a bank account, or physical cash.
ACH payments operate through the ACH network, which serves as a digital payment infrastructure. This network streamlines payment processing, bookkeeping, and accounting operations, making it faster and more reliable for businesses. Rather than manually handling each payment through a third-party processor, ACH payments consolidate these activities into an efficient, automated process.
How ACH payment processing works
ACH payments rely on either ACH credit or ACH debit, depending on whether the transaction is pushing funds to a recipient or pulling them from an account. To process an ACH payment, the payer must provide specific banking information, such as routing and account numbers for both the payer and payee, along with contact details.
Gravity’s ACH payment system allows for both standard and same-day processing, providing business owners with flexibility. Whether next-day or same-day ACH processing, Gravity Software ensures that payments are processed smoothly without the need to handle complex payment tracking manually.
Benefits of ACH payment processing solutions
Cost savings
ACH payments reduce administrative costs and typically have lower transaction fees compared to other methods like wire transfers or checks. This can lead to substantial savings over time, especially for businesses that process many transactions.
Convenience
ACH transfers can be used for a wide range of purposes, from paying vendors and suppliers to sending payments to government agencies or receiving payments from customers. This versatility simplifies financial management for businesses of all sizes.
Increased efficiency
Because ACH payments are processed in batches, the process is automated and reduces the need for manual intervention. This not only speeds up payments but also minimizes the risk of human error.
Improved cash flow
With ACH payments, businesses can better predict when payments will be received or sent, leading to improved cash flow management. This predictability allows for better financial planning and reduces the chance of late payments disrupting operations.
Potential risks with ACH payment processing
As with any financial process, there are potential risks to be aware of with ACH payments:
Possible errors
ACH transactions can introduce errors that cause payment delays or failures, such as entering incorrect account numbers or routing details. However, similar errors are also possible with paper checks.
Fees
While ACH is generally more cost-effective, there are still small fees associated with processing each transaction. For businesses handling a large volume of ACH payments, these fees can add up over time.
Security concerns
Since ACH transactions rely on sensitive banking details, they can be vulnerable to cyberattacks if not properly protected. Gravity Software addresses this concern by leveraging Microsoft’s government-grade cybersecurity protocols, ensuring that ACH payments are as secure as possible. Microsoft’s SOC 2, SOC 3, and HIPAA-compliant infrastructure help protect businesses from data breaches.
Accepting ACH payments
In most cases, businesses need a payment processor to accept ACH payments from customers. Gravity’s ACH payment processing integration simplifies this process by eliminating the need for third-party processors like Bill.com. This all-in-one solution means businesses can streamline their payment operations and minimize the risk of errors associated with using multiple systems.
When considering ACH payments, it's important to think about how they align with your overall business processes, including how payments will be reconciled and tracked in your accounting software.
Using Gravity’s ACH payment processing software
One of the key factors in effectively managing ACH payments is having software that integrates with your accounting system. Gravity Software’s ACH payment processing works seamlessly with other financial processes like purchase order management and accounts payable automation. Gravity’s AI-powered invoice processing reads a bill and automatically creates a voucher for your team to pay within the system.
Next, your team will register and verify each bank account, either through a deposit of a very small amount or with a service like Plaid that allows verification based on credentials. You can then add a payment method, either by manually entering the account number and routing number, or send a link to your vendor. There are several ACH payment methods you can use from here. And you can set up payments in batches.
With Gravity’s multi-entity accounting software, all ACH transactions are automatically reflected in the general ledger and financial reports. This integration ensures that your accounting records are accurate and up-to-date, reducing the workload for your finance team and improving overall operational efficiency.
Managing ACH transactions
Managing ACH payments involves more than just processing transactions—it’s about optimizing your payment workflows. Gravity’s ACH solution makes it easy to monitor and analyze ACH payment data, allowing businesses to spot areas for improvement and streamline processes. For example, by automating certain tasks within accounts payable or using the system’s customizable reports, companies can save time while improving financial accuracy.
Regular monitoring of ACH transactions helps ensure accuracy and allows you to identify trends, such as which vendors or customers frequently cause payment delays. By addressing these issues proactively, businesses can further improve cash flow and financial performance.
Best practices for ACH payment processing
To make the most of ACH payments, businesses should follow a few best practices:
Verify account information
Always double-check routing and account numbers to avoid errors that could result in delayed or failed transactions.
Use secure systems
Use secure, reliable systems to process ACH payments, ensuring that sensitive data is protected from potential breaches.
Automate where possible
Automating payment processing reduces the chances of human error and frees up your team to focus on more strategic tasks.
Industries that benefit from ACH payment processing
While any business can benefit from ACH payment processing, some industries are particularly well-suited for it. For instances, ACH payments make it easy for online businesses to process transactions quickly and efficiently, reducing cart abandonment rates and improving the overall customer experience.
Medical billing often involves large sums of money and recurring payments, making ACH a reliable method for managing patient payments and insurance claims.
Banks and financial institutions can also use ACH payments for services like direct deposits, recurring payments, and bill payment processing.
While some companies may see bigger benefits due to a high volume of transactions, any business that pays bills can benefit from ACH payments.
Implementing ACH payment processing for your business
Implementing ACH payments is a straightforward process with the right software. Start by selecting a payment processor like Gravity Software that integrates seamlessly with your accounting system. From there, train your team on how to use the system effectively, ensuring they understand the importance of verifying payment details and tracking transactions.
Simplify payments with Gravity Software
ACH payment processing offers significant advantages for businesses looking to improve their payment operations. Gravity Software’s new ACH processing feature eliminates the need for third-party solutions like Bill.com, providing a streamlined, secure, and cost-effective way to manage payments. By automating ACH transactions, businesses can reduce errors, save time, and enhance overall financial performance.
Ready to explore the benefits of ACH payment processing? Schedule a demo and take the first step toward streamlining your financial operations.
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