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Glossary

What is the Automated Clearing House?

The Automated Clearing House (ACH) is the United States network that moves money electronically between bank accounts, without checks or cards.

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How it works

The network is governed by Nacha, the National Automated Clearing House Association. It moves electronic fund transfers between banks in batches. A business or person sends a payment instruction to its bank, which passes it into the network, and the receiving bank credits or debits the other account.

Types of transfers

  • Direct deposit. Credits such as payroll or supplier payments pushed into an account.
  • Direct payment. Debits pulled from an account, such as bill payments.
  • Business to business payments. Supplier payments sent from accounts payable.

Why businesses use it

Electronic transfers through this network usually cost less than wires or checks, cannot be lost in the mail and are easier to reconcile, because the payment carries data that links it to the invoices it settles. That makes it a common choice for routine supplier payments in the United States.

How Aavenir handles it

Aavenir does not move money. Invoiceflow checks and approves invoices, then passes approved payments to your enterprise resource planning or payment system, which sends them through the bank.

Keep reading

Straight through processing Straight through processing moves a payment or invoice from start to finish electronically, with no manual step.Read more Dynamic discounting Dynamic discounting lets a buyer pay a supplier early in return for a discount that grows the earlier it pays.Read more Vendor validation Vendor validation confirms that a supplier is real, legitimate and still the business it claims to be.Read more

Frequently asked questions (FAQ)

Common questions

How is an Automated Clearing House transfer different from a wire?

Transfers through the Automated Clearing House are processed in batches and usually cost less. Wire transfers move individually, settle faster and usually cost more, so they suit urgent or high value payments. Read about straight through processing.

Who runs the Automated Clearing House?

Nacha, the National Automated Clearing House Association, governs the network and sets its rules. The Federal Reserve and a private operator process the transfers between banks. Read about accounts payable.

How do businesses pay suppliers through the Automated Clearing House?

Accounts payable collects verified bank details from each supplier, approves invoices for payment and sends a payment file to its bank. Verifying bank details first is essential to prevent fraud. Read about vendor validation.

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See your contracts run on one record.

  • 1 A 30 minute walkthrough Built around your team, whether that is procurement, legal, IT or finance.
  • 2 Your contracts, not ours Bring a few sample agreements and watch Aavenir AI extract and review them.
  • 3 ServiceNow or standalone We show the deployment that fits the systems you already run.

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