Using ACH EFT Services

Paying bills is just a part of life. Few people enjoy sitting down, writing checks, searching for stamps, and then having to remember to send the bill off. However, failing to pay bills on time can result in a number of problems for people, including loss of services or ruined credit.

For this reason, a number of people are turning to Automated Clearing House/Electronic Fund Ttransfer services to pay their bills. ACH/EFT services work like direct deposit in reverse - each month, the bills you would like to come directly out of your account and automatically debited, so there is no need to write out checks and send off bills anymore.

Some of the benefits of using ACH EFT services include:

• Simplified bill payments. Consumers never have to deal with the hassle of writing checks and making sure bills are sent on time. The payments are automatically debited, so even if you're out of town, your bills will still be on time.


• Money savings. The average family spends $85 a year in postage to mail bills, and that doesn't include the costs of an occasional next-day air payment. ACH EFT saves money, as most of these services are free or a nominal cost from the bank.


• Increased security. With ACH EFT, there's no need to worry about a bill getting lost or stolen in the mail. Everything is done electronically, so your account information doesn't pass through as many hands as a regular check would. In addition, special rules are in place that prohibit the company from debiting more than you authorize, and it also doesn't allow them to take the payment before the date you authorize it to be debited.


• No more late payments. For those who struggle with getting bills mailed on time, ACH EFT is a lifesaver. Even a few late payments can hurt a credit score.

How Does ACH EFT Work?

1. First, the customer gives written authorization for a company to debit payments from a checking or savings account and then gives account number information.


2. Sometimes, the amount of monthly payments varies. When this is the case, the company sends the customer a notification of the payment amount 10 days before the payment transaction.


3. The company may opt to make test entries called pre-notifications, which their bank processes through the ACH network. The ACH network then lets the company know of any necessary corrections.


4. Next, the company prepares the ACH file for delivery to its bank a day or two before the bill is due, usually by electronic transfer.


5. The company's ACH provider then processes the information and delivers it to the ACH's network for distribution.


6. The customer's bank then reports the transaction monthly on customer account statements.

Most companies prefer their customers use ACH EFT services for a number of reasons, mainly so the payments are made on time and it is easier and more efficient for all involved.

Signing up for ACH EFT is very simple. Generally, a company will even include the forms on occasion in the monthly bill, and you simply fill out the information and return it. If not, you can easily call the company's billing department and have them set it up. Many banks also offer this service, sometimes for free, and sometimes with a fee associated with it.

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