Automated Clearing House (ACH) payments are electronic payments made through the ACH network, an electronic network to a large number of transactions that take place in the United States grips with some of the most common are: payroll deposits, mortgage bills, utility bills, insurance bills, B2B (business to business) payments and e-commerce payments. For businesses, an ACH online payment has several advantages over repayment by check, money order, or telephone, in particular:
1. Timely payments
If links to e-mail or phone payments, many customers procrastinate, which translates missing from your company money that could be in accounting, which could lead to lower investment ratings. While late payment from your company should not say out of business, they complicate its current finances.
2. Fewer late payments
While some entities to benefit handsomely from late fees, they can lead to other entities to lose money in the form of lost customers. While consumers continue to pay late fees to entities whose services are essential, such as banks and insurance companies, they are often non-payers when faced with late fees for services that are more redundant. ACH benefits customer loyalty by helping to prevent late fees.
3. Faster access to funds
ACH imbursements take less processing time than standard debit and credit imbursements, about 1-2 days compared to 2-3 weeks, respectively . Posted imbursements behalf of a company sooner rather than later makes it possible to achieve greater financial flexibility in the present, especially if a majority of the income comes from wages ACH.
4. Less collateral expense
With traditional methods of reimbursement are some costs that eliminates ACH pay, such as: paper, postage, telephone and extensive staff. Automatic payments can also reduce the costs of collection action, both in-house or through outsourcing, as they make it difficult to walk for hidden fees and missed payments.
The disadvantages of ACH wages are not drawbacks as much as they are risks that must be addressed in order to benefit from the scheme, such as:
1. Offsite data storage
Offsite data storage can be found cheaply via Software as a Service (SaaS) providers who specialize in security and storage of data, or merchant services that offer the same service. Keeping wage data stored offsite in encrypted form is crucial for the preservation of the fires, floods or theft of the computer.
Like all systems that use stored financial information, the ACH system is a target for fraud, both internally and externally, with statistics showing the former poses the greatest risk in terms of data theft. Fraudulent activity can be greatly reduced by the presence of firewalls that protect against interior and exterior harmful activities, and by entering into smart personnel practices, including the following four:
1. With using permanent rather than temporary workers for certain jobs
2. Separation critical tasks as much as possible
3. Stepping up screening procedures for certain positions; and
4. Resetting passwords for sensitive accounts regularly