If you operate a small business, having a fast and easy way to process your payables and receivables is critical. Increasingly, organizations of all sizes are relying on ACH payments as a more efficient alternative to paper checks sent by mail.
ACH payments are electronic money transfers between financial institutions that are processed through the Automated Clearing House Network. They allow you to specify payment dates in advance and complete transactions quickly, often in the same day. ACH payments can help improve your business’s cash management by giving you greater control over the timing of payments, and the convenience of originating ACH transactions can free up more time to focus on running your business.
Using ACH to Your Advantage
By relying on ACH for more of your transactions, you can reduce the costs and labor associated with cutting and mailing checks. Even better, you can help to optimize your cash flow by scheduling payments for their actual due dates, so you can hold onto your cash as long as possible while avoiding late fees. You will also have a way to collect customer payments faster, which can help reduce uncertainty about when transactions will clear.
With the help of a sophisticated banking partner, here are a few ways that you can use ACH services to streamline your business operations:
– Pay employees with direct deposit, which can save you time when completing payroll and provide more convenience for your staff.
– Set up recurring payments with direct debit, so you don’t have to worry about keeping track of rent, utilities, and other routine expenses.
– Transfer invoice data with your payments to simplify vendor or supplier payments. – Pay local, state, and federal tax obligations electronically.
– Move money between accounts at different banking institutions rapidly and securely.
Protecting Against ACH Fraud
As with any payment method, it’s important to be aware of potential scams and take steps to protect your business. While online banking and other systems are encrypted to protect ACH transfers and other transactions, there are multiple ways that cyberthieves can attempt to obtain sensitive data and transfer money to themselves.
The most common methods are phishing and malware. Phishing is when an impostor sends an email purportedly from a legitimate entity to trick the recipient into revealing information or initiating a transaction. Malware, short for malicious software, gleans account numbers and passwords by scanning files or capturing keystrokes.
Here are some best practices that you can implement to minimize the risk of costly breaches:
1. Use fraud protection tools that can automatically flag ACH transactions that don’t meet predefined criteria or block ACH debits from any account that is not used for payments.
2. Implement dual control procedures for the initiation of ACH payments.
3. Run the latest anti-malware programs on any computers on which transactions are processed.
4. Always scrutinize emails – no matter how official they look – that request account information or direct you to web links. Remember that legitimate businesses will never contact you in this way to request sensitive information.
5. Reconcile all your banking transactions on a regular basis.
6. Create different passwords for every website you use, change your passwords regularly, and avoid using autofill features that save your login credentials on your computer.
7. Immediately alert your financial institution to any suspicious transactions – there may be a limited recovery window, and quick action may prevent further loss.
By following a few smart tips, you can use ACH services to help keep your business moving. And when it comes time for a big leap forward – like a new storefront, tech upgrade, or product rollout – consider Nu Direction. Wholly owned by federally insured credit unions, our commitment is to Main Street and not Wall Street. Eligible small businesses can receive an instant preliminary offer and secure funding in as little as a week. Apply today!
The information contained herein is for general informational purposes only and does not constitute tax, legal, or business advice.
Brought to you by Nu Direction Lending, a digital-first business lender that was formed and is funded by credit unions. To learn more about term loans for your business, visit nudirectionlending.com or contact us by email at firstname.lastname@example.org or by phone at 866-354-7151.
Nu Direction Lending is a digital-first business lender that was formed and is funded by credit unions. We combine the speed and convenience of online lenders with the personalized touch of the local credit unions who help fuel our local economies.