4 Steps For Filling Out an ACH Payment Authorization Form

Many businesses have turned to online, card-free, electronic payment options like automated clearing house (ACH). As a business owner who wants to use an ACH, it is essential to know what an ACH authorization form is and how to fill it out. If you are unsure about the requirements or need the answer to the question “Why use an ACH authorization form?” read this article to get more information on these forms and the four steps to ensure you fill them out correctly.

What is an ACH Authorization Form?

An ACH authorization form is a legally required document you can use to complete the automated clearing house payment authorization process. The form grants a banking institution approval to electronically retrieve or initiate business-related financial payments, which may come from another bank account, a credit union, or a prepaid card.

You may think of an ACH authorization form as a legal document that binds two parties. It is a type of contract that shows consent is granted for the transaction.

How Can You Process Payments Using ACH?

If you want to process payments using the ACH network, you must begin by soliciting the services of a trusted payment processor partner. The payment processor partner you select can be your financial provider; you may choose your business bank account.

What is the Difference Between a One-time and a Recurring ACH Form? 

You can use these two different types of ACH forms for different types of payment deductions. The one-time ACH form is valid for a single amount, while a recurring ACH form is valid for deducting several amounts over a timeframe. If you need to make regular payments, a recurring ACH form is ideal; for one payment, use the one-time ACH form.

Which 5 Key Details Are on an ACH Payment Authorization Form?

ACH forms have obligatory elements. For instance, you should check that the form declares you can stop or revoke a payment. But there are other essential pieces of information on these forms. Five key details you will find on an ACH authorization form include:

• The details of the business that is receiving the payment
• The personal information of the client making the payment
• The sum or sums of money to be taken
• A section that describes the services or goods the customer receives
• How often the payments will be made

Which 4 Steps Should You Follow to Fill Out ACH Authorization Forms?

Consider the eight steps listed below before you fill out an ACH authorization form to ensure you fulfill the requirements.

1. Indicate the payment amount on the form

Ensure you include the payment amount and the frequency of the payments, and specify when the payment will be initiated

2. Specify the charges if the form requires it

Specify whether the charge is recurring or one-time by selecting the required checkbox (if the form requires it). A one-time charge refers to a single amount deducted from your bank account; a recurring billing option makes it possible to deduct money each week or month.

3. Fill out billing information

Processing the payment requires billing information. Make sure you fill out the billing information, including a phone number, email address, and billing address.

4. Add your signature and the date

Ensure you add your signature to the form and write the date you completed it. This action demonstrates that you have given consent for the transaction or transactions to occur.

What Is the Easiest Way to Receive ACH Payments?

The easiest way to receive ACH payments is to get the payee to fill out an authorization form. The form will notify your bank that you can take the payment from the payee’s account.

As soon as the payee has completed the form, you can use payment processing software to complete the transaction – but only on the date or dates that you have agreed with the payee.

Filling out ACH Payment Authorization Forms: Key Facts to Remember

When making transactions as a business, an ACH payment authorization is essential. If the transaction is a recurring (ongoing) deduction, use a recurring ACH form; if the transaction is a one-time deduction, use a one-time ACH form.

Since an ACH payment authorization form is a legal document, ensure you fill it out correctly. Ensure you sign and date the form and retain a copy for your records. A copy of your form can help you quickly settle any problems if an issue arises.