How to make an ACH payment in 5 easy steps

For businesses paying vendors, employees, or service providers, ACH payments streamline transactions, reduce costs, and eliminate the hassle of traditional payment methods. As a form of electronic payment, ACH is a secure way to send money and manage everything from bill payments to refunds.

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Here’s everything you need to know about how to make ACH payments for businesses.

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Understanding different ACH payment types

ACH payments, which are EFTs that move money between bank accounts over the ACH network, come in two main forms: ACH debit and ACH credit.

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Here’s how they work:

• ACH debit: This pulls funds from your account, making it ideal for recurring payments like monthly bills or subscription services.
• ACH credit: This pushes funds to another account, often used for paying vendors, suppliers, or employees through direct deposit or other automated methods.

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Knowing the difference between types of ACH payments helps you manage cash flow more effectively. For example, ACH debit ensures you pay bills automatically, avoiding late fees, while ACH credit lets you control payment timing to align with incoming revenue.

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With these payment types in mind, let’s break down how to set up and send ACH payments step by step.

How to make ACH payments in 5 easy steps

ACH payments are straightforward when broken into actionable steps. Each one ensures accuracy, compliance, and efficiency in your payment processing.

Step 1: Gather the necessary information

Before initiating an ACH payment, make sure you have everything ready:

• Your business’s bank details: Account number, routing number, and account name
• Recipient’s bank account information: The payee’s account number, routing number, and account name
• Payment specifics: Include the amount, payment date, and any memo for reference.
• Written authorization: This formal agreement allows you to process the payment and ensures compliance with NACHA rules

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Having these details on hand prevents errors and ensures the money transfers flow seamlessly.

Step 2: Choose an ACH provider

Your ACH provider acts as the middleman, handling transactions securely and efficiently. The right provider makes a significant difference when allowing flexible payment options.

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Here’s what to look for when choosing an ACH provider:

• NACHA compliance: Choose providers who meet standard NACHA operating rules.
• Transparent fees: Know what each transaction costs upfront.
• ERP compatibility: Ensure the system integrates with your accounting software for seamless management.
• User-friendly tools: Reliable interfaces and helpful customer support make managing payments easier.

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A provider that checks these boxes will streamline your ACH processing and protect your business.

Step 3: Set up ACH payments in your system

Setting up ACH payments involves integrating the necessary details into your business’s financial systems. Make sure to:

• Integrate banking information: Enter your business’s account information into your provider’s platform or ERP system.
• Add vendor details: Double-check the accuracy of recipient data to avoid failed transactions.
• Verify permissions: Ensure you have proper authorization to process payments, protecting your business from compliance issues.

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Proper setup minimizes errors and keeps everything running smoothly.

Step 4: Make an ACH payment

With your system set up, paying vendors via ACH is straightforward. Here’s how to do it:

1. Select the payment type: Decide between single, batch, or recurring payments based on what fits your needs.
2. Enter and review payment details: Double-check the recipient’s account information, payment amount, and memo or reference details.
3. Authorize the transaction: Approve the payment with your credentials, such as multi-factor authentication or a digital signature.

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If you’re unsure which payment type to use, here’s how they differ:

• Single payments: Best for one-time transfers, like paying a vendor or contractor.
• Batch payments: Useful for processing multiple payments at once, saving time on vendor invoices or paychecks through payroll.
• Recurring payments: Automate ongoing expenses, like rent or subscriptions, to reduce manual effort.

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Whether you're processing a single payment or automating recurring payments, ACH transactions are ideal for secure, efficient online payments.

Step 5: Monitor and reconcile payments

Typically, ACH transfers take 1-3 business days to complete. When they process, make sure to monitor and reconcile your ACH payments to ensure accuracy and keep your financial records in order. Simply do this by:

• Tracking records: Keep a log of transactions, including dates, amounts, and recipient details.
• Reviewing bank statements: Regularly check statements to confirm completed payments and catch discrepancies.
• Reconciling invoices: Match outgoing payments to invoices to ensure everything aligns.

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With consistent monitoring, your business stays organized and avoids costly mistakes.

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Considerations when using ACH payments

ACH payments simplify business finances, but a few key factors can influence how and when transactions are processed. Here’s what you should know:

• Cut-off times: Submitting payments after the daily deadline means they’ll process the next business day.
• Sufficient funds: Ensure your account balance can cover the transaction to avoid failed payments and potential fees.
• Transaction limits: Some banks or ACH providers set caps on how much you can send in a single payment or per day.

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By planning ahead and staying within these guidelines, your business can keep payments running smoothly without interruptions.

Benefits of ACH payments for businesses

ACH payments don’t just streamline transactions—they transform how businesses handle their finances. By leveraging this payment method, companies gain advantages that go beyond simple convenience such as:

• Cost savings: ACH transfers are less expensive than wire transfers, ePayables, or paper checks.
• Efficiency: Automating payments reduces manual work and streamlines processes.
• Security: Built-in encryption and NACHA compliance protect against fraud.
• Integration: ACH systems can connect with your ERP or accounting software, simplifying payment workflows.

Automate your ACH payments with Ramp

No matter which payment processor or payment method you choose, Ramp’s modern finance platform can help improve your payment processing workflows. From checks, card payments, same-day ACH, and international wire transfers, our AP automation software enables you to manage all payments seamlessly from a single dashboard.

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Ramp Bill Pay uses AI to automate your entire accounts payable workflow, from processing invoices to scheduling payments. With all your payment data in a unified dashboard, you can quickly find any invoice, analyze monthly spend, and find opportunities to optimize cash flow.

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Feel interested? Watch our demo video to see why Ramp customers save an average of 5% a year.