How to Process an ACH Payment

To process an ACH payment, securely collect your customer’s bank details, get authorization, and then submit the transaction through your payment processor. Unlike credit cards, ACH transfers go directly from one bank to another, which makes them cost-effective for recurring billing, large invoices, or subscription services.

Verify That Your Business Can Accept ACH Payments

Before processing ACH payments, your business needs to have ACH capabilities enabled through a payment processor or bank. Most processors require you to go through an application process to reduce the risk of fraud.

Key things to confirm:

• Business bank account: You need an eligible business checking account.
• Processor approval: Some providers may review your industry type and financial history.
• Customer authorization: ACH rules require explicit permission from customers (written, online form, or recorded call).

Example: If you run a contracting business, you might have your customer sign an ACH authorization form allowing you to debit their account monthly for ongoing work.

Collect Customer Authorization

You cannot pull money from a customer’s account without their permission. Authorization can be obtained in several ways:

• Signed paper form (for in-person agreements)
• Online authorization form (through a secure portal)
• Recorded verbal agreement (less common, but allowed if documented properly)

Details that should be included in the authorization:

• Customer’s name and bank account number
• Bank routing number
• Type of account (checking or savings)
• Amount and frequency (one-time or recurring)
• Date of authorization and customer’s signature/consent

Pro tip: Store authorizations securely — ACH processors and banks can request them at any time for compliance.

Enter ACH Payment Details into Your Payment System

Once you have authorization, the next step is to enter the customer’s banking information into your system.

Information you’ll need:

• Bank routing number (9 digits)
• Customer’s bank account number
• Payment amount
• Payment date (immediate or scheduled)

Some payment processors also let you import ACH data through a CSV upload if you’re processing multiple payments at once (e.g., payroll, rent collections, or subscription billing).

Submit the ACH Payment

After entering the payment details, submit the payment through your processor or accounting software. The ACH network processes transactions in batches, not instantly like credit cards.

• Processing time: Usually 1–3 business days.
• Status updates: Your dashboard should show whether the payment is “Pending,” “Processed,” or “Returned.”
• Returned payments: Can happen if there are insufficient funds, incorrect account details, or a revoked authorization.

Example: A roofing company invoices $5,000 for materials delivered. The customer pays via ACH, and the funds show up in the business bank account two days later.

Confirm the Payment and Update Records

Once the ACH payment clears, update your accounting system to reflect the payment.

Best practices:

• Mark the invoice as “Paid” (or “Partially Paid” if progress billing).
• Send a payment receipt to your customer.
• Reconcile your bank statement to ensure funds match expected deposits.

This not only keeps your books accurate but also builds trust with your customers since they receive confirmation promptly.

Handle Returns or Failed Payments

Sometimes ACH payments fail. If that happens:

• Contact your customer to resolve issues (insufficient funds, wrong account details, etc.).
• Resubmit the ACH payment after corrections.
• Consider setting up automated reminders for customers with recurring issues.

Example: ACH Payment Workflow for a Contractor

Bonus Tip: Automate ACH Payments with DepositFix

Instead of manually chasing customers for payments, DepositFix lets you request and process ACH payments directly through your branded payment forms. Customers can authorize ACH with a single click, and payments sync automatically with your CRM and accounting tools.

With DepositFix, you can:

• Offer ACH as a payment option alongside credit cards.
• Automate recurring ACH billing for subscriptions or ongoing contracts.
• Track payment history without manual reconciliation.

This saves time, reduces errors, and ensures consistent cash flow for your business.