We all know how cash strapped small and medium-sized businesses can be.
In order to make sure that the wheels keep on spinning, the presence of ample cash is necessary and works as a lifeblood for any business.
There have been cases when even seemingly profitable businesses succumbed to the dire need of cash as they were not able to meet their obligations and therefore, forced to solvency.
So the last thing especially an SMB need is running out of cash when they need it most.
Also Read: How to track expenses in FreshBooks?
So what’s the solution?
To keep this requirement of liquidity in view, FreshBooks has introduced a feature of ACH payments to shorten the cash cycle of the businesses.
What is FreshBooks ACH Payment Feature?
ACH (Automated Clearing House) is a network of interconnected financial institutions which allows businesses and individuals to transfer money from one bank to another.
Available only to the U.S users for now, with ACH feature a FreshBooks user can accept payments from their customers within a short span of time.
Why ACH is better?
ACH allows you to receive faster payments from the customers at a much lower rate. Thanks to the 1% service fee.
The payments get deposited within 3-5 days. This tenure is going to shorten by the end of 2019 when FreshBooks will enable the facility of same/next day deposit.
Moreover, as compared to the checks, where you have to make sure that the client has sufficient balance in his account, wait for the check to mail, delivered and clear from the bank account, ACH allows an easy account-to-account transfer of funds from the client’s/customer’s account to yours.
This means that you get paid up to 2x faster than the check and that with fewer efforts.
Not just for you but for your clients as well. Who’d prefer storing checkbooks and writing checks over digitally paying up their invoices?
How does the FreshBooks ACH Feature work?
All you have to do is to enable FreshBooks Payments. To do so you need to:
- Click the gear icon on the top left side of the dashboard and then select Accept Online Payments
- Slide the toggle green next to Accept ACH Bank Transfers to enable ACH payments in your invoices
Once enabled, you can give your customers the choice between paying online or by bank transfer.
On their invoice, your client can opt for ACH as a method of payment and authenticate their bank account. FreshBooks Payments will verify whether or not the client has sufficient funds and will approve or decline the transaction.
FreshBooks ACH is a great feature introduced to ease one of the many hardships that entrepreneurs have to endure. Using this feature will not only facilitate you in your cash availability but will also smooth your vital business process of A/R management.
In the end, here’s a quick video as a refresher!