Benefits of direct deposit and ACH recurring billing
By Becky Towne, Business Loan/ACH Specialist from CitizensFirst Credit Union
We are all looking at cutting costs and streamlining business processes these days. If you are still printing or writing checks for payroll or recurring billings, you need to seriously take a look at the difference of utilizing an ACH processing system (direct deposit and/or recurring billing).
DIRECT DEPOSIT
Purchasing, printing and distributing checks can be very expensive and time consuming. Take a look at all the benefits yourself:
Reduced Costs
- Fewer checks to buy
- Lower account charges for number of checks cleared
- Lower costs for check distribution (printing, envelopes, postage in some cases, etc)
- Reduced risks for check fraud
Increased Efficiency
- Eliminates time to print and sign checks
- Easier and quicker check disbursement
- Greatly simplifies account reconcilement
- Eliminates lost/stolen paycheck problems (Did you know that nearly 4 million paychecks a year are lost or stolen?)
- Reduced storage space for cancelled checks
- Fewer incorrect pay amounts from typing checks
- Easier payroll research
Increased employee benefits
- No need to make a trip to cash or deposit checks
- Increased confidentiality of payroll
- Eliminates payroll problems for sick, traveling, or vacationing employees
DIRECT PAYMENT
You can elect to set up your recurring account receivables through the ACH processing system. No more waiting 30 or 60 days to get paid. Set up your customers to pay you safely, securely and most of all, timely!
REDUCED COSTS
- Lower costs for billing (invoice printing, return envelopes, postage, etc)
- Lower account charges for ACH items
IMPROVED CASH FLOW
- Immediate access to the funds on the date due
- Credit amount is known in advance
INCREASED EFFICIENCY
- Eliminates time to create invoices
- Fewer incoming checks to process
- Improved accuracy over customer-written checks
- Simplified research
- Easier handling of returned items
INCREASED SERVICE TO CUSTOMERS
- Eliminates need to write and mail checks
- Removes concern about late payments
- Bank statement shows description of payment
- Increased confidentiality
IMPROVED MARKETING CAPABILITY
- Provides a progressive image to customers
- Provides an additional benefit
- Increases customer retention
IMPROVED DELINQUENCY RATIO
- Receive more payments on time
- Reduces second billing notices
- Reduces collection processes
Direct deposit means your funds are in your account immediately, and so is access to the funds. Check with your local financial institution for this service to save you time, money and headaches.
ABOUT THE AUTHOR
With an expanded knowledge of numerous departments, Becky Towne has been with CitizensFirst Credit Union for over 25 years. She has a strong background in finance with consumer, mortgage and commercial lending experience.
