Setting Up ACH Payments for your Business

Setting your business up to initiate ACH payments can be instrumental in improving your business’ cash flow. It is typically simple to setup, but it is not automatic.

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First, most businesses will setup ACH payment processing through their bank. While there are other services out there that will allow you to set this up without using your bank, the fees are often much more significant to use a service separate from your bank.

The bank will typically have you go through an underwriting process to setup ACH processing. This is because the bank is taking on some risk by funding your account with your customer’s funds (which could later be rejected or returned). The bank will likely request financial statements and or tax returns to complete their process. Though, they may be able to approve you for ACH processing by your account activity alone.


Once you are setup for ACH processing, review the fees that will be charged by your bank. This will help you to develop your processes and timing for ACH payments. For example, some banks charge a per file fee as well as a per transaction fee. If this is the case, you want to try and bundle your ACH processing vs. processing each customer payment individually, because you’ll avoid paying additional “per file” fees each time.


Develop your ACH payment process. If you are billing customers on a regular schedule, you can setup your ACH process so that you will initiate the payments from your customer accounts on the same day each week, month, quarter, etc. If you are billing your customers for activity (hours, product delivered, etc.), then you may create a process where you pull the funds from your customer accounts 7 days following the issuance of your invoice. Determine the best process for your business and then set up your other processes (invoicing, AR review, etc.) to work within that process.


Create an ACH agreement to go along with your services agreements that authorizes you to pull funds from your customers accounts. You cannot initiate ACH payments from your customers without having this authorization on file.

Most ACH/banking systems will give you the ability to setup your customers within the system, so that you do not have to re-enter their banking information each time you need to pull funds. You can also typically setup templates for recurring transactions. So, for example, if you are going to pull funds each Friday for the activity billed the previous week, you can set up each customer in your Friday ACH template and then modify the amounts to pull each week based on the invoices you created. You can also set these templates up to automatically process if the amounts won’t change monthly. Another option is to use the file upload option for processing your ACH files. The bank will have a specific template you can download to understand the format needed and then you can utilize your accounting system to populate a file with the appropriate information needed to upload into the ACH system and process the payments.


Getting setup with your bank to initiate ACH payments can be a gamechanger in your cash flow management. Connect with your banker to see how to get the process started.


Written by: Shauna Huntington