ACH (Electronic Check Acceptance) Part 1

Automated Clearing House is a means of electronic funds transfer initiated by the banking industry and governed by the National Automated Clearing House Association (NACHA). ACH converts a check into an electronic stream which is transmitted from one source to another. A contract is created between the merchant or owner of a business and its clients. The contract is a mutual agreement authorizing use of this electronic stream for quickly moving money back and forth from client to business owner. The originator or business owner initiates the transaction by requesting a credit or debit of funds from the originating bank. The originating bank, in turn, requests a debit or credit from the receiver or client’s bank. The receivers’ funds are then debited or credited accordingly. The process is simple and user friendly. Strict regulations enforced by NACHA create a secure environment for the electronic check industry.

Checks typically clear in 7-14 business days. For businesses that work strictly on invoicing, this system of networks greatly reduces payment time and receivables on the books. ACH eliminates the need for collections, and instantly informs the user if client funds are available. Recurring billing is available and integrates easily into small business accounting systems. ACH is efficient, reliable, and secure.

Todd Rome
todd@southernlendingsolutions.com