Automated Clearing House transactions are part of an expansive electronic payment system. Individuals, financial institutions, companies and parts of the government utilize them. According to Electronic Funds Corporation, cash management is often easier and costs are reduced. There are many other specific benefits of this system.
The benefits from using Automated Clearing House transactions are numerous. They differ for the various uses of the transactions. With direct deposit you will find a reconcilement process that is streamlined. Because the checks are automatic, there is less worry about the critical need to deliver. When employees are away, they will still have their money moved as necessary without needing to make special arrangements. There is less worry about needing to store checks. Also, the employees do not need to waste time taking their checks to the bank on payday since everything will be done for them.
There are also many benefits for the Automated Clearing House transactions of direct payment. A person can schedule a specific payment date such as the billing date. They will know that it will get there in time but will not need to remember to do it themselves. They can also wait until the last minute to transfer the money, providing them with a financial benefit.
There is no need for the handling of checks needed for manual payment processing. Companies will also save money on the printing and postage of paper bills that are no longer needed including duplicate bills. There is less delinquency of receivables. There is no more worry about checks that are incorrectly created and less chance of insufficient funds.
In the area of corporate payments, forecasting of cash flow will be easier. You can make discounts for specific payment dates that are created in advance. Bank service charges and internal processing costs are both lower. Vendors may have a better relationship since they have less delinquent payments with which to deal.
Automated Clearing House transactions used for re-presented check entries also see benefits. These include reduced costs, quicker collection on checks that are returned and entries transmission on scheduled dates.
With point-of-purchase entries, there is a quicker collection of the money. Companies obviously like to get their money faster. Costs are reduced. If there is a return it is noticed quicker.
There are many advantages to Automated Clearing House transactions. It is very widespread, which leaves it as a valuable option for most people. It is forecast to become even more available in the future with new features.