Offering your clients a frictionless payment process is one of the top ways to improve your cash flow and grow your home service business. ACH payments allow you to do just that.
As a convenient online alternative to checks, collecting ACH payments allows you to manage jobs and payments of all sizes while offering clients the right payment option for their personal preferences and for your business.
Keep reading to learn more about ACH payments and how to start accepting them for your services.
What is an ACH payment?
An ACH payment method is an electronic, bank-to-bank money transfer processed through the Automated Clearing House (ACH) network.
The Automated Clearing House network (ACH) is regulated by the federal government and managed by the National Automated Clearing House Association (NACHA). It adds a layer of security when transferring funds from one bank account to another.
For home service providers, using an automated clearinghouse network, allows customers to send payment directly to their preferred account.
It may seem like a new concept, but if you’re paying monthly utility bills or making mortgage payments by transferring funds out of your account—you’re probably already taking advantage of ACH payments.
Other common forms of ACH payments include:
- A taxpayer paying owed dues to the IRS online
- An employer paying employees through direct deposit
- A business owner paying suppliers for goods or services
How do ACH payments work?
An ACH transaction tells banks to move money between accounts using your account and routing numbers.
A bank sends instructions through a secure network to either deposit money (like a paycheck) or withdraw it (like a bill payment), and the funds usually settle within 4 business days.
Types of ACH transactions
There are two types of ACH payments—an ACH credit and an ACH debit.
An ACH credit transaction is initiated by the payer, pushing funds into a recipient’s bank account.
For example, you use ACH credits to pay your employees by transferring salaries directly from your business bank account to theirs.
An ACH debit transaction, on the other hand, is initiated by the payee (service provider), pulling funds from the payer’s (or client’s) bank account. An ACH debit transaction typically includes prior authorization from the payer.
For example, Your landscaping business sets up automatic monthly payments for your clients’ recurring lawn care services. With your clients’ authorization, you initiate ACH debits to withdraw the agreed-upon service fees directly from their bank account.
The benefits of ACH payment processing
ACH payment processing offers many benefits to both service providers and clients alike.
How ACH payments help businesses
Here’s how your business can benefit from offering ACH payments:
- ACH payments have some of the lowest processing fees available with users paying as little as 1% on each transaction—so you’ll keep a larger share of your earnings.
- ACH payments are quick and hassle-free. Your customers can make payments directly from their bank accounts without needing to write checks, take money out of the bank, or use a credit card.
- ACH payments are automatically deposited into your account, without a trip to the bank—giving you more time to work on your business.
- ACH payments reduce the risk of lost or fraudulent checks.
- ACH payments offer predictable deposit timelines, making it easier to manage your cash flow.
How ACH payments help customers
Plus, ACH payments offer benefits your customers can take advantage of as well, including:
- Your clients can turn on automatic payments for recurring work like, lawn care, house cleaning, HVAC maintenance, or pest control.
- ACH payments typically have lower fees compared to credit card transactions.
- ACH payments reduce the risk of lost or stolen checks, providing your customers with a more secure payment method.
- With automated ACH payments, your customers can avoid outstanding invoices and late fees with timely (scheduled) payments.
ACH payments vs wire transfers – what’s the difference?
While ACH payments and wire transfers both include electronically transferring funds between bank accounts, they differ in the following ways:
- Processing speed – ACH payments are processed in batches and typically take up to 4 working days to complete. Wire transfers are processed individually, and are usually completed within the same business day.
- Cost per transaction – The average ACH payment costs between $0.26 and $0.50, while domestic outgoing wire transfers cost an average of $26 in the United States.
- Security – ACH payments can be reversed in case of error or fraud, offering an added level of protection for service business owners and their clients. Wire transfers, however, are typically irreversible once processed.
- What they’re used for – ACH payments are typically used for routine transactions, like payroll deposits, bill payments, or recurring transfers. Wire transfers are best suited for large, urgent transactions, like purchasing real estate or sending funds internationally.
How to accept ACH payments
ACH payments are one form of electronic payment that sends payment directly from one bank account to another through the Automated Clearing House network.
In order to receive funds through ACH, the following needs to happen:
- Before a transaction can be initiated, you need to request authorization from the customer to collect payment from their bank account.
- With your customer’s authorization, initiate the transaction by sending payment details to your bank (also known as the Originating Depository Financial Institution or ODFI).
- The ODFI will then send a request for payment to the customer’s bank on your behalf (also known as the Receiving Depository Financial Institution or RDFI).
- The RDFI will check the customer’s account to make sure the funds are there and then process the payment.
ACH payments are particularly useful when collecting funds for recurring jobs such as residential or commercial cleaning, lawn care, or snow removal services.
By asking customers to sign up for ACH payments, you can collect payment for your services, hassle-free at the end of each service period.
Jobber makes processing ACH payments seamless by integrating all four steps within one easy-to-use portal. Simply select ACH bank payments as an option under the invoices preferences and quotes preferences sections on your payment settings to allow clients to pay using ACH.
To save their bank account for future payments, clients can select the “Remember these bank details for future payments” option.
Jobber’s ACH Bank Payments features
Jobber’s ACH payment processing offers a secure and efficient way to accept bank payments directly from clients’ accounts. Here’s what’s included:
- Cost-effective transactions: ACH payments are available for a 1% processing fee, making them a more affordable alternative to credit card payments.
- Automatic payments: ACH payments can be set up for automatic billing, streamlining the payment process for recurring services.
- Manual bank entry: Your clients can manually enter their bank details to pay their invoices online.
- Partial payments and refunds: Let your clients make partial payments for their services, or provide partial refunds—all through ACH.
- Built-in transaction monitoring: Jobber monitors ACH transactions for processing status, errors, and failed payments to keep you informed and reduce payment delays.
- Reporting: Jobber provides detailed reports on all ACH transactions, including payment statuses and associated fees.
NOTE: ACH payments through Jobber are currently available only in the United States.
Other Jobber payment options
Jobber’s online credit card processing features help you get paid faster by making it easier for clients to pay online, or on the job site.
- Online card payments: When it’s time to pay an invoice, customers can conveniently enter their credit card details manually, or with Apple Pay or Google Pay through client hub, their self-serve customer portal.
- Automatic payments: For recurring work, like lawn care or cleaning, Jobber automatically charges customer cards saved on file—so you can get paid without lifting a finger.
- Jobber Card Reader: Accept credit and debit card payments right at the job site, with one tap on the Jobber Card Reader.
Plus, Jobber makes it easy for customers to tip you when paying invoices online, rewarding your excellent service.
Online payments are built into your Jobber account with no extra monthly or setup fees—you’re only charged when you receive a payment.
Get started with ACH payment processing
Say goodbye to unpaid deposits and overdue invoices. Jobber makes it easy to collect payments from clients and improve your cash flow strategy.
With Jobber Payments, your clients can securely link their banking information and pay invoices or quote deposits online through client hub, their online customer portal.
And since accepting ACH payments only costs 1% in processing fees per transaction, you’ll receive more cash for the job, faster.