The Automated Clearing House (ACH) Network is soaring to new heights, so there’s never been a better time to ramp up ACH adoption and usage.
In fact, the network set two new records in the first quarter of 2021:
- In February, the quarterly volume hit 7.1 billion payments – an 11.2% increase from the first quarter of 2020.
- In March, the ACH volume hit 2.7 billion payments – the largest monthly volume in history.
And CFOs can assume this electronic payment method will only continue to grow in popularity over time. Each day, more companies are realizing the benefits of ACH payments – they’re cheaper, they involve less labor to process, they clear fast for improved cash flow. The list goes on and on.
The question: How can you increase ACH usage with your trading partners, so you can reap all those benefits?
Check out four tactics to drive more ACH adoption in A/P and A/R, courtesy of Rob Unger from Nacha, the National Automated Clearing House Association:
1. Introduce it early
CFOs know it can be difficult to change habits and introduce new methods. Vendors and customers often “like things the way they are.”
That’s why it’s key, with new trading partners, to introduce ACH during onboarding. You could make ACH the default payment method in your contract or service agreement. Businesses will have to make additional effort if they want to opt out and choose another payment method.
2. Pick up the phone
It sounds too simple, right? Not so. A Nacha survey found that contacting businesses directly and asking them to go for ACH was a highly successful tactic.
Unger’s advice: Identify which of A/P’s vendors receive the most checks from you and which of A/R’s customers send the most checks to you. Then have a few staffers carve out time to call these specific trading partners.
3. Take advantage of conversations
In a similar vein, Unger says to encourage your staff to leverage “teachable moments,” when they’re already on the phone or a video call with a trading partner.
For example: Let’s say a customer calls A/R to tell you about a delayed check payment. You could mention that could be avoided in the future by using ACH payments instead.
4. Broadcast instructions
Sometimes, people don’t like what they aren’t familiar with. Vendors or customers may see switching to ACH as just another thing that’s going to take a lot of time and energy. So, providing clear instructions or a quick walk-through could help them see just how easy it is.
Unger recommends leveraging the item your trading partners pay the most attention to: the bill or invoice. Put clear ACH payment instructions on your invoices for a little nudge. You could also put instructions on your company’s website, so you can quickly shoot trading partners a link via email. The easier you make it for them, the more likely they are to get on board.