You want more ACH payments from your customers because ACH:
- Costs less than check and card payments;
- Requires less labor to process than checks and you can’t increase hires (or have to decrease head count);
- Clears quickly for improved cash flow;
- Provides customer convenience with an option for credit (i.e. “push”) and/or debit (i.e. “pull”) payments;
- Reduces fraud exposure;
- Carries a boatload of remittance details for easier cash application, particularly for business-to-business (B2B) payments.
But it’s hard to get customers to change payment behavior. We hear that all the time. In many instances, it’s the customer that chooses how to pay. And billers/suppliers, well, you don’t want to inconvenience customers. That seems like good business sense.
Guess what? You can influence customer payment behavior without causing any ill effects. In our research on payment receivables, the suppliers/billers with the highest rates of ACH payments received have a number activities in common. Here are five ways the ACH superstars drive ACH volume:
- Define a “payments mix” strategy and goals that outline end-of-year and year-over-year goals for what the customer payment mix (i.e., the percentage of check, ACH, credit card, wire) should look like.
- Allocate a budget (I know, you can’t get a budget – we’ll get to that soon!) for driving the payment mix goals. A budget can fund activities like messaging campaigns, customer payment incentives, service rep training for inbound calls, sales rep compensation for including “pay by ACH” in the sale, etc.
- Promote ACH during customer onboarding. It’s hard to change habits; get your new customers to pay via ACH by default in your contract/service agreement, so they have to “opt-out” to pay by another method.
“So, that sounds great, Rob, but while my execs say they want more ACH, they won’t provide any resources or funding.”
Getting commitment throughout all the necessary business lines within a company can be tough. Meanwhile, your receivables/credit/accounting/finance department is drowning. What can be done? Go old school ….
- Pick up the phone! In our survey, companies told us that contacting customers directly and asking them to pay by ACH was highly successful. A lot of business customers want to pay you via ACH because it benefits them too.
A good strategy is to identify which companies send you the most checks, and have a couple of employees take a brief “holiday” from regular duties to call these customers. Or, use an intern.
- Answer the phone! For consumer and business customers alike, leverage “teachable moments,” like when they call the billing department about a late payment or related issue. Let them know how the problem can be avoided with an ACH payment.
- (Bonus recommendation) Provide instruction on how to pay by ACH. Leverage the one communication your customer probably pays attention to: the bill or invoice. Lobby to have clear ACH payment instructions provided on bills/invoices and your website.
Let us know if you have tried any of these – or other methods – and what has worked well for increasing ACH payments you receive.
Meanwhile, here are some resources to help you get started with ACH payments (or to improve your program):
Nacha Consulting is offering a free, 15-minute phone consultation to discuss your issues and evaluate options. Complete this form if you would like to connect with the Nacha Consulting team to discuss your organization’s ACH risk issues, Rules compliance, best practices or other concerns.
Nacha has numerous resources to help businesses better understand the benefits and best practices for ACH payments: