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Automated Clearing House (ACH)

An Automated Clearing House (ACH) is an electronic network that facilitates the transfer of funds between bank accounts in the United States (and internationally with some variations).

What is Automated Clearing House (ACH)?

Automated Clearing House (ACH) is an electronic network used for processing financial transactions in the United States. The network acts as a central hub that processes large batches of electronic payments efficiently, making it a popular method for B2B (Business-to-Business) payments and consumer payments like direct deposit and bill payments and other automated money transfers.

ACH transactions are known for their efficiency, security and cost-effectiveness compared to traditional payment methods like checks.

The use of ACH reduces the need for physical handling of money, lowering transaction costs and minimizing the risk of errors. Businesses benefit from faster processing times and improved cash flow management. Additionally, ACH transactions are highly secure, reducing the risk of fraud and providing a reliable way to handle regular, recurring payments.

Recommended terms

Accounts Payable Automation
Accounts payable automation (AP Automation) refers to the use of technology and software solutions to streamline and optimize the accounts payable process within an organization.
Advanced Billing
Advanced billing refers to sophisticated billing practices or capabilities that go beyond basic billing functionalities to address complex billing scenarios, accommodate specialized pricing structures, and support advanced revenue recognition requirements.
Annual Contract Value (ACV)
Annual Contract Value (ACV) is a metric used to assess the average yearly revenue generated by a single customer contract. It helps businesses understand the annualized worth of their customer base, focusing on recurring revenue streams.

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Automated Clearing House (ACH)

What is Automated Clearing House (ACH)?

Automated Clearing House (ACH) is an electronic network used for processing financial transactions in the United States. The network acts as a central hub that processes large batches of electronic payments efficiently, making it a popular method for B2B (Business-to-Business) payments and consumer payments like direct deposit and bill payments and other automated money transfers.

ACH transactions are known for their efficiency, security and cost-effectiveness compared to traditional payment methods like checks.

The use of ACH reduces the need for physical handling of money, lowering transaction costs and minimizing the risk of errors. Businesses benefit from faster processing times and improved cash flow management. Additionally, ACH transactions are highly secure, reducing the risk of fraud and providing a reliable way to handle regular, recurring payments.

Related terms

Billing and Invoicing
Automated Clearing House (ACH)
An Automated Clearing House (ACH) is an electronic network that facilitates the transfer of funds between bank accounts in the United States (and internationally with some variations).
Billing and Invoicing
B2B Payments
B2B payments, short for Business-to-Business payments, refer to financial transactions that occur between companies. This is distinct from B2C (Business-to-Consumer) transactions where businesses sell goods or services directly to individual customers.
AP Automation
AR Automation
Billing and Invoicing
Invoice Processing
Invoice processing is the entire workflow a business follows to manage incoming invoices from suppliers or vendors, all the way from receiving them to paying them. It's essentially how companies ensure they're paying the right amount, to the right vendor, at the right time.
Billing and Invoicing
Revenue Leakage
Revenue leakage refers to the unintentional loss of revenue that a business earns but fails to collect.
Billing and Invoicing
Quote-to-Cash (Q2C)
Quote-to-Cash (Q2C), also sometimes referred to as Quote-to-Order-to-Cash (QTC), is the entire business process encompassing all the activities involved in generating a sale from the initial quote to receiving payment.
Billing and Invoicing
Annual Contract Value (ACV)
Annual Contract Value (ACV) is a metric used to assess the average yearly revenue generated by a single customer contract. It helps businesses understand the annualized worth of their customer base, focusing on recurring revenue streams.