Glossary · Payment methods
ACH transfer
Also called ACH payment, Automated Clearing House
An ACH transfer is a US bank-to-bank payment through the Automated Clearing House network, the usual way businesses pay invoices electronically in the US.
The ACH network moves payments between US bank accounts in batches, under rules set by Nacha. An ACH credit is pushed by the payer (a customer paying your invoice); an ACH debit is pulled by the payee with the payer’s authorisation (you collecting a payment you were authorised to take).
Standard ACH payments typically settle in one to two business days. Same Day ACH settles faster and handles payments up to $1 million each. Fees are low compared with wires and cards, which is why B2B payers prefer it.
For collections, the remittance detail is what matters. Business ACH formats can carry addenda with invoice numbers; ask customers to include them, or a lump-sum ACH credit becomes unapplied cash.
Example
A US client pays three invoices totalling $18,400 by ACH credit, with the invoice numbers in the addenda. The money settles the next business day and the supplier’s software matches all three.