Comparing Automated Clearing House And Electronic Funds Transfer For Accounts Payable Solutions
Whats The Difference Between Ach And Eft
In todays digital world, finance executives are looking for more efficient ways to manage their accounts payable processes. Automated Clearing House (ACH) and Electronic Funds Transfer (EFT) are two popular payment methods and to effectively evaluate which solution is best suited to their business, finance executives must understand the differences between each system.
The core distinction of ACH vs. EFT is that the ACH method consists of facilitated, electronic payments while the EFT system encompasses both automated and manual transfers of payments. ACH is typically used when payments are accepted in real-time, while EFT works best for computer-assisted, scheduled payment transfers. Additionally, ACH is more widely used for sending and receiving large batches of payments to vendors, while EFT can be used for both large and small payments.
An important factor in deciding on the best payment system for accounts payable is the setup and processing time for ACH vs. EFT. ACH payments can be processed in under one business day, making it fast way for finance executives to send and receive payments. On the other hand, EFT payments may take up to three business days to be received and processed.
When it comes to costs, EFT is usually more expensive with flat rate fee, while ACH payments have higher processing fee but it is much lower than the EFT fee when payments are made in bulk. In terms of security, ACH is more secure payment method with numerous safety protocols during the transaction process.
To guarantee business have made the best decision regarding ACH and EFT, they must look beyond the obvious differences and evaluate their accounts payable solutions in greater detail. For example, businesseshould consider their payment volume and decide if they would prefer ACH?s high volume payments or EFT?s flexibility when it comes to large and smaller remittances. Additionally, it is important for finance executives to evaluate the fees for each system and decide which of the two offer the most cost and time-effective solution.
Both ACH and EFT are popular payment systems which provide reliable solutions for business? accounts payable automation software. However, finance executives must carefully research both methods, understand the differences and evaluate their payment needs to gain the best outcome from their accounts payable software.
