ACH
Automated Clearing House - an electronic network for financial transactions.
ACH is the electronic network that processes batch transactions between banks, including direct deposits, bill payments, and business-to-business transfers. ACH payments are typically cheaper than wire transfers (often free or under $1) but take 1–3 business days to settle. Same-day ACH is available for a small fee.
Example
A small business pays all 10 employees via ACH direct deposit, saving the cost and hassle of printing and distributing physical paychecks each pay period.
Why It Matters for Your Business
ACH is the most cost-effective way to send and receive payments, and understanding it helps you choose the right payment method for each transaction.
Related Terms
More Banking Terms
APR
Annual Percentage Rate - the yearly cost of borrowing including fees.
APY
Annual Percentage Yield - the real rate of return on savings including compound interest.
Bank Reconciliation
Matching bank statements with internal records to identify discrepancies.
Business Checking
A bank account designed for business transactions.
Line of Credit
A flexible loan allowing businesses to borrow up to a limit as needed.
Related Financial Guides & Resources
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