Online Payment Processing for Small Manufacturing Business Owners: Achieving Efficiency and Security with ACH

Businesses in the manufacturing sector have increased over the past few years. According to industry statistics, there are about 718,595 manufacturing businesses across the U.S. as of 2023, an increase of 3.7% from 2022. Like in other sectors, companies in this industry invest in powerful technologies for all their departments. 

One of the key areas of focus is streamlining the company’s payment process. As a small manufacturing business owner, you need to give your customers an easier way to pay their sales orders and invoices. You need an integrated payment processor that accepts ACH payments and effectively works with your existing business software. 

This blog post will examine how you can achieve efficiency and security by accepting ACH online payments in your manufacturing business. 

An Overview of ACH Payments

Automated Clearing House or ACH payments are a type of electronic fund transfer. Organizations use ACH technology to process recurring payments because it has lower processing fees. 

While ACH payments are sent from one bank to another via the ACH Network, credit card payments rely on the EFT Network to complete transactions. In addition, wire transfers also use the EFT Network to transfer large sums of money, especially across international borders. However, ACH saves businesses money, is highly secure, and has faster processing times than wire transfers and credit card transactions. 

ACH Payment Processing for Small Businesses

The ACH Network processed about 7.3 billion payments in Q1 of 2022. Most business owners are switching to digital payments to take advantage of the benefits. Here are just some of the advantages of using an ACH payment processor in your manufacturing business:

• Increased Security: Processing payments via ACH is highly secure because the transactions go through multiple levels of checks and security.
• Lower Transaction Fees: Your business will save money because the transaction fee for ACH payments is much lower compared to credit and debit card transactions.
• Reduced Human Error: If you have several employees or clients, you need an automated payment processor that schedules payments.
• Faster Processing Time: ACH transfers are becoming much faster thanks to technology. In some cases, you can get same-day processing. 

Learn more about the benefits of ACH payment processing.

ACH Payment Processing for Manufacturers

Large manufacturing companies generate a massive volume of B2B invoices. Additionally, they process orders from individual customers. While most of them now accept ACH payments, some challenges may still come up.

Integration Issues

To manage payments, most manufacturing companies use accounting software to manage financial data, project planning, and monitor the company’s financial situation. Therefore, business owners must find a payment processor that integrates with their current invoicing software. Fortunately, there are payment gateways that provide integrated tools for ACH processing. 

Security Risks

As digital payments become more popular, there’s increased risk. Fraudulent transactions can cost your manufacturing business, especially when fraudsters access sensitive financial information. This is why choosing a reliable PCI-Compliant ACH payment processor that provides advanced security features for your small business is important.

Processing Costs and Times

ACH payment solutions were known to be slower than wire transfers and credit card payments. This can inconvenience your business, especially if you need to process invoices. However, with technological advancements, ACH processing can now happen within the same day. 

Businesses lose about 2-4% per transaction for credit card processing. However, implementing a Cash Discount Program saves merchants fees and offers customers better discounts. 

Choosing The Best ACH Payment Processing Service For Small Business Manufacturing Accounts

If you plan to choose the best ACH payment processor for your manufacturing business, here are some of the things to consider.

• Features: Your payment processor should offer your business features such as an extra level of security and customized solutions to ensure that your payment system is efficient. 
• Costs: If you are trying to lower business operating costs, you need to get an ACH payment processor that allows you to save money. You don’t have to send mail to customers when dispatching invoices; you can send them digitally via email invoicing. 
• Support: To process real-time payments, you should go for a payment processor that is reliable and supportive. 

Setting Up ACH Payments For Small Business Manufacturing Accounts

Here’s how to set up ACH payments for your business.

Step 1: Open a Merchant Account

To accept ACH payments in your manufacturing business, you need to open a separate bank account to hold the cash.

Step 2: Integrate the ACH Payments into Your Existing Accounting Software

Whether you have a commercial, enterprise, or custom accounting software, you need to integrate it with the ACH Network for easier payment processing. You can also integrate your payments page with your website via a hosted payment portal – that incorporates all your branding elements. 

Step 3: Choose an ACH Payment Processor

Once you set up the account, you need to choose a reliable third-party ACH processor for your manufacturing business. This will get you:

• Hosted Payment Portal: This application enables payment acceptance and authorization via a virtual terminal and check scanner.
• IVR Integration: Instead of accepting paper checks, you can automate your payments to allow customers to make payments over the phone using keypad or voice recognition. 
• Cash Discount Program: To avoid paying expensive transaction fees, you can use a CDP to incentivize your customers to pay for goods and services via ACH, SMS, or IVR systems. This allows you to keep 100% of the revenue.  
• SMS Invoicing: You can also notify your customers about pending bills and prompt them to make payments via a secure link. 

Security Measures to Keep the ACH Payments Information Safe and Secure

Like other online payment methods, ACH solutions have some risk of fraud. However, Nacha, the U.S. governing body of the ACH Network, has taken measures to reduce the risk. ACH payments are encrypted to protect sensitive financial information with features like tokenization, BIN filtering, iFrame, and end-to-end encryption. 

Bottomline

Your manufacturing business can achieve efficiency and security with ACH payments. However, to ensure that your payments are safe, you need to partner with a PCI-Compliant payment processor like iCG. Get in touch with our experts for more information.