AR Execs Gear Up For ACH To Surpass Check Use, NACHA Finds

Accounts receivable professionals are preparing for paper checks to decline and automated clearing house (ACH) payments to rise, according to a new report by the National Automated Clearing House Association (NACHA) and the Credit Research Foundation (CRF).

CRF and NACHA released a new survey this week that explores how credit and accounts receivable (AR) professionals are planning for changes in B2B payments trends. At present, checks make up about half of business-to-business (B2B) payments, ACH for 32 percent, credit and debit cards for 11 percent, and cash and wire for 8 percent.

Check payments have declined since 2014, while ACH, cards, cash and wire have all increased.

AR professionals expect ACH payments to make up 45 percent of the payments received by 2020, while checks are expected to decline to 34 percent. The same professionals also predict cards will hold at 12.5 percent, while cash and wire would constitute about 8.5 percent.

“The big growth in ACH payments anticipated by credit and receivables professionals, in just three years, is truly significant,” said Rob Unger, senior director of corporate relations and product management for NACHA. “It demonstrates the growing importance of ACH payments to support the evolving needs and goals of businesses. Because they are electronic, allow for remittance to be sent with the payment in a variety of formats, are more cost-effective than other payment options and can be received quickly, ACH payments are becoming a very attractive option to both accounts payable and accounts receivable professionals.”

In another statement, CRF vice president of research and education Matt Skudera said ACH supports AR professionals’ needs for efficient cash flow management.

“Moving to electronic payments enables credit executives to meet these challenges by allowing for more consistent processes, greater control in operations, better management of cash flow position and more,” said Skudera. “ACH helps credit executives get one step closer to the nirvana they all seek — 100 percent straight throughput processing.”

The research also found internal factors to be the most commonly cited reason for changes in payment behavior, followed by technology improvements and customer push.

While accounts receivable executives are pushing to be paid via ACH — when polled, 80 percent of AR professionals said it was their preferred method of payment — nearly half said they still have some customers without the capability to send ACH payments. More than one-third said their customers do have ACH capabilities, but do not properly send remittance information when they pay through ACH.

Further, one-fifth of accounts receivable executives said their own companies did not have the systems and resources needed to effectively use ACH.

“The survey clearly shows that there is great interest, use and opportunity in ACH payments,” said Unger. “Continued education, exploration of new tools and services like robotic automation of cash application, and leveraging new tactics — such as effectively providing education and marketing ACH to customers — will help break down the barriers to adoption and allow businesses to reap the benefits ACH payments provide.”