Cash flow is the lifeblood of companies, and faster closure of accounts receivables ensures smoother operations, particularly with respect to purchases, payroll, investments, debit reduction and any other functions requiring payment. Cash flow forecasting is one of the key metrics for most treasury departments and one of the most challenging to get right consistently.

Previously, ACH payments or collections initiated “today” were received and settled “tomorrow.”  The classic/next-day ACH transfer is still an option, and Same Day ACH is even a faster offering. Giving flexibility when further speed is needed for making a payment. For example:

• Executing emergency payments, off-cycle disbursements and corrections or payouts, time critical/due-date payments, or account transfers;
• Correcting errors/re-initiating payment; and
• Reducing costs compared to other expedited payment options.

On Sept. 15, 2017, Same Day ACH was made available for debit payments (when funds are “pulled” from a customer account) enabling the same-day processing of virtually any ACH payment.  Same Day ACH debits can improve the collections and cash flow process too. For example:

• Speeding the funds collection cycle without having to change customer behavior, and thereby improving the logistics cycle/disbursements of goods/services, particularly for higher risk/cash only/credit hold customers;

• Reducing risk with faster notifications regarding problem payments (e.g. account not found, incorrect account number, insufficient funds, debit block), thus providing an opportunity to speed resolution and follow-up actions (e.g., having payments corrected, re-initiated, resolving “dropped” payments); and

• Reducing costs compared to other expedited payment options.

While Same Day ACH is an optional payment method for sending or collecting payments, businesses that receive ACH payments will now be empowered to receive Same Day ACH payments in addition to “classic” ACH payments.

Spend a moment and think of the possibilities available to you by receiving the funds being paid to you one day sooner. What could you do with the added Cashflow and shorter DSO average? Some of our clients have determined this one aspect could mean a tremendous opportunity for re-investment of their receivables. What could it mean to you?

Same Day ACH presents a range of opportunities for both the payables and receivables sides of the business.  With this, it’s important as well to understand the all the implementation considerations as Same Day ACH can have a great impact on your business.