Bill Pay Vendors: How To Pay a Vendor via ACH and 3 Benefits

Nicole Georgiev
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    As a business owner, it’s important to establish a good relationship with your vendor, just like it is to pay them on time. Paying your bill pay vendors is possible through an ACH payment. To ensure the process is done right, you have to learn how to pay a vendor via ACH.

    It’s common for businesses to use checks or credit cards to pay their bills. However, ACH transfers provide business owners with an easy way to pay their vendors. This is especially true if the vendors accept payments online

    This blog post helps you understand how to pay a vendor via ACH so that you can implement this process for your business. The first step is to understand how to find vendors and ensure strong supplier relationship management practices. 


    Bill Pay Vendors: 3 Ways To Digitally Pay Vendors

    When it comes time to pay your vendors, you have a few different options to choose from. Most accounts payable departments are phasing out the use of paper checks. In fact, many vendors will prefer digital B2B payments such as eCheck, credit card, or ACH vendor payments.

    Three ways to digitally pay vendors include:

    1. ACH
    2. Automated Checks
    3. Virtual Cards or vCards

    These three digital payment methods have value and can benefit your business regardless of the industry that you’re in. This includes the restaurant industry, food and beverage industry, and other hospitality industries. 

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    ACH Payments 

    An ACH payment is processed by a bank or credit union through the Automated Clearing House. These are direct payments that are used to pay vendors directly from business checking accounts. 

    In many cases, the funds are deposited in the vendor’s account within 1 to 3 business days. This speed and convenience are why many businesses prefer to use this method for vendor billing and payment.

    If you’re a client using BlueCart payment processing, you may be interested in using BlueCart Pay. This will allow you to pay via ACH and have BlueCart handle the rest. 

    Key Takeaway: ACH vendor payments are a secure, fast, and convenient way to pay your vendors. It allows you to make on-time and quick payments to your vendors.

    Automated Checks

    A more traditional payment method involves the use of checks. They have been around for centuries in the United States. 

    Despite checks being a more outdated payment method, they are still valuable financial tools to use. In fact, there are a couple of ways to use checks to pay your vendors.

    The first way is to get out your checkbook, handwrite each check, put it in an envelope, seal it, add a stamp, and mail it out to your vendor. It’s important to do this with enough time before the vendor’s due date to avoid late payments. 

    Despite being labor-intensive and costly, manually sending out paper checks to your vendors is common practice for some businesses. However, it’s not the way to pay using a check.

    The second way to use a check to pay your vendors is using automated check processing. This method provides you with the benefits of sending a check, without all the hassle.

    It’s possible to automate your accounts payable using different wholesale billing software. This software will typically automate check processing, so you can pay your vendors.

    Virtual Cards or vCards

    Some businesses seek to combine the benefits of physical purchasing cards, a check, and the efficiency of an ACH payment. It’s possible to do this with virtual cards, also known as vCards. 

    This may reduce the risk of fraud, including credit card fraud, improve cash flow, and allow you to quickly pay your vendors. vCards provide a controlled invoice process that allows you to control who is getting paid and how much money is spent. 

    An important aspect that virtual cards provide is the shift from accounts payable from a source of overhead expenses to revenue generation. Virtual cards deliver rebates and these are tangible expressions of this revenue generation, especially in the restaurant industry


    How To Pay a Vendor via ACH

    When it comes time to pay your vendors, you’re going to want to know how to pay a vendor via ACH. Automated Clearing House payments are primarily used in the United States, and it’s a way to electronically transfer funds from one bank to another.

    In order for the funds to leave your bank account and be deposited into the vendor’s bank account, they must use the ACH network. When using ACH payments to pay vendors, there are a few things to keep in mind.

    • You can only pay vendors that have a US bank account.
    • It’s not possible to complete an ACH payment if you don’t have sufficient funds in your bank account.
    • Some banks and credit unions have daily and monthly limits on ACH transfers.

    Be mindful of payment processing time. It’s important to allow enough time for the payment to be processed so that you can stay within your vendor’s payment deadline. It’s also important to ensure you have enough funds in your account to make the payment.

    3 Benefits of ACH payments

    Many businesses use ACH payments to pay their vendors, regardless of the industry they’re in. ACH payments provide win-win scenarios for vendors and business owners. 

    Three benefits of ACH payments include:

    1. Low transaction fees. ACH payments tend to have low transaction fees. This is especially true when compared to credit card payments and wire transfers. The processing fees for ACH payments will vary depending on the bank or financial institution's policies. However, many banks offer free ACH transfers. 
    2. Quick payments. It’s important for businesses to be able to quickly pay their vendors. With ACH payments, vendors receive their payments electronically. This is faster than check payments and cheaper than credit card payments. The electronic payment process takes less time to complete and process than it would with a check. 
    3. Increased security. Paying via ACH is a secure process. Even though payments are made electronically, there are strict protocols and security standards in place that protect these payments. These protocols help reduce the risk of fraud.
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    Frequently Asked Questions About Bill Pay Vendors

    Digitized payments are taking over and this is no surprise, especially in a world where technology is constantly innovating. Many businesses are seeking quick and easy payment methods, particularly when they have to pay their vendors.

    It’s possible to pay your vendors through different online payments. One of which is an ACH payment. To better understand how to pay a vendor via ACH, read our frequently asked questions below.

    What Is the Best Way To Pay Vendors?

    The best way to pay vendors is via ACH payments, checks, or credit cards. These payment methods are preferred because of their convenience and quick processing time. 

    If you’re wondering how to pay a vendor via ACH, the process is quite simple. You have to make sure that you allow enough time for payment processing in order to meet the deadline for the vendor payment. It’s also important to ensure that you have enough money in your account for the payment.

    What Is an ACH Payment?

    An ACH payment stands for Automated Clearing House, and it’s a United States financial network that is used for electronic payments and transferring money. ACH payments are also known as direct payments. It’s a way people can transfer money from one bank account to another without the use of credit card networks, cash, paper checks, or wire transfers. 

    What Are Examples of ACH Payments?

    Five examples of ACH payments include: 

    1. Transferring money from one bank account to another (PayPal, Venmo, etc.)
    2. Direct deposit from your employer
    3. Businesses paying vendors for products and services
    4. Customers paying their service providers
    5. Paying bills with a bank account
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