What ACH Bank Services Offer Businesses

In a world where business is constantly moving increasingly faster, companies are always seeking out ways to streamline operations while saving time. For those that devote excessive time and energy into managing regular payments, ACH bank services can be a powerful tool.

In this blog, your Central Bank ACH experts delve into the details of a service that can help companies of all sizes work smarter, not harder. From answers to the common “What is ACH?” query to how to gauge whether ACH services are right for your company and how to best prepare for discussions with your local bank, we’re here to help get you started. Read on for ACH tips and insights centered around you.


Back to Basics: What is ACH Payment?
Central Bank believes knowledge is power as it relates to one’s finances. Before we delve into the details surrounding ACH services, let’s answer a question that has been poised to our business banking experts more than once: What is ACH payment?

ACH stands for Automated Clearing House, a nationwide network that facilitates secure online funds transfers between local financial institutions such as Central Bank, credit unions, big corporate banks and the like. ACH services offer a simple and efficient solution for everything from payroll transactions to bill payments and the ability to collect electronic payment from customers, too. Their benefits extend beyond that, however, including:

  • Improved Security: The authentication and encryption protocols incorporated into ACH payment systems help keep sensitive data protected. In addition, because fewer people view ACH payment information than do with more traditional financial transactions, there’s a lower risk of fraud.

  • Cost-Effective Transactions: ACH transactions typically carry lower processing fees than paper checks or wire transfers do, resulting in added savings for a business.

  • Operational Efficiency: ACH transactions’ electronic nature eliminates the need for time-intensive manual processing, allowing staffers to focus efforts on other tasks. They also save time by allowing a business to process multiple transactions by the batch.

  • Speedy Transfers: Although processing takes longer than with wire transfers, ACH payment transactions are fast. Funds are typically available within one to two business days — and many financial institutions, including Central Bank, offer options for same-day ACH services.

  • Added Convenience: ACH payments aid businesses in that they can be made through checking or savings accounts, and they don’t require in-person bank visits. And because they offer customers new options for sending and receiving funds, they can improve client satisfaction — and result in longer relationships.

  • Better Options Amid Emergencies: Unlike checks, which can be easily lost or damaged — or which can fall victim to delivery delays — ACH transactions can be processed on schedule, even when the weather takes a turn.


How Does the ACH Transfer Process Work?
An ACH transfer works much like an online version of the post office. For this specific example, think of each transfer request as an individual letter.

  • When it comes time to make a vendor payment or settle employee payroll, your business receives notice of what is owed. 

  • You authorize funds for those payments to come out of your account. If you’re doing payroll for a number of employees and also paying a few bills, those will be separate payments, or “letters.”  

  • The bank fostering your ACH transfer, known as the originating depository financial institution (ODFI), debits the funds from your account. Just as it doesn’t make sense for a mail carrier to travel back and forth with one letter at a time, however, sending payments one by one would be overly time-consuming. As such, payments are packaged up and sent to the central clearing facility in bulk batches.

  • The central clearing facility then sends those “letters” to the bank that will be handling the payment, known here as the receiving depository financial institution (RDFI). Upon receipt, the RDFI processes the transaction.

  • Once the transaction has cleared, funds are added to the proper account(s).

Just as outgoing mail is collected numerous times each day, this process is repeated throughout the workday. Specific intervals will vary by financial institution.


Factors to Consider Before Incorporating ACH Payments into Your Business
At Central Bank, we recommend having a thorough understanding of a service’s ins, outs and potential impacts before factoring it into your everyday workflow. (The good news is, your local banker will be happy to walk you through how things work and answer any questions you might have.) Let’s discuss some of the potential obstacles associated with ACH payments.

  • Reversal Risks: If the account from which your ACH transaction is pulling payment doesn’t have adequate funds, payment will likely be halted — and the transaction reversed. This can lead to operational delays.

  • Quick, But Not Instantaneous, Processing: ACH transfers often take one to two business days to process. This has the potential to introduce cashflow issues for companies with limited funds.

  • Compliance Considerations: Businesses that take part in ACH transactions are required to follow guidelines established by the National Automated Clearing House Association (NACHA) and related regulatory bodies. Participating companies found to be uncompliant with the rules may face fines and penalties.


Central Bank ACH Services: Getting Started with Your Local Bank
Do ACH bank options feel like a good fit for your business? Are you interested in Central Bank ACH services? That’s great! Your local bank would be happy to sit down with you to discuss your options and help ensure it’s the right approach for your company before moving forward.

Central Bank ACH services are customizable to suit your operations. Same Day ACH offerings allow you to initiate, process and clear both debit and credit transactions in a single business day, pending you meet the 2:30 p.m. cutoff time. If speed is important — but not a top concern — our traditional ACH origination transactions reach completion the next business day. Here are some things we recommend having prepared when you meet to discuss your ideal approach to Central Bank ACH services.

  • Come Prepared to Discuss Payment Practices: How many transactions do you make in a traditional month? What does payroll look like? What payments do you have incoming and outgoing? What are the amounts? Pull together any information that can provide your banker with a clear understanding of your needs and how ACH services could help.

  • Allow Adequate Time for Your Meeting: As with any bank service, there will be forms to sign and paperwork to go over to get your ACH support underway. Schedule your appointment in a way that allows you to handle the work and ask questions without feeling rushed.     

  • Feel Free to Ask Questions: ACH transactions can be confusing if you don’t deal in such work each day. We recommend bringing a list of questions to your meeting, so you don’t forget what to ask in the moment. Whether you’re curious about the type of ACH support your local bank provides, you have questions about associated costs, there are concerns regarding account security — or something else entirely — your banker wants you to feel comfortable with your decision, and will be happy to talk through each point.


ACH bank services can be a great way to save time and energy while streamlining your company’s day-to-day operations. If you have questions about how it all works, or if you’re interested in learning more about Central Bank ACH services, please reach out to our team. Your local bank is glad to help.