No, hearing from the Automated Clearing House doesn’t mean Ed McMahon’s knocking at your door with one of those over-sized checks. That’s because the Automated Clearing House (ACH) is the way more procurement people, vendors, customers — anyone involved in the give-and-take of exchanging money for goods or services — are paying each other, without using any paper bills or checks.

ACH use is growing monstrously. In 2007, more than 18 billion ACH payments were made – 12.6% more than the previous year, according to stats logged by the Electronic Payments Association (NACHA).

Consumer use of ACH is primarily for direct deposit, Social Security and similar functions.

But businesses and government agencies working together use ACH for a variety of purposes:

• to/from trading partners
• vendor payments
• business-to-government tax withholdings
• intra-company cash management transfers, and
• to exchange remittance information about payments.

To get more information about broadening the online capacities of your company’s procurement and payment practices, visit non-profit NACHA’ site: www.nacha.org or go to www.electronicpayments.org

Any way you slice it, paying bills and collecting payments without paper is where we’re headed. You can try to seize upon the cost-savings benefits now, or hold on for a while with the expected costs to implement ACH have dropped.

.

Tags: ACH, NACHA, payments, procurement