Everything You Should Know About Same-Day ACH

For managed service providers (MSPs), staying competitive and keeping clients happy is the name of the game. A key part of that involves ensuring payments move quickly and reliably – whether it's for payroll, vendor payments, or client reimbursements.  

Among the laundry list of digital payment options, the Automated Clearing House (ACH) system has long been a trusted U.S. payment network for transferring funds electronically. But as MSPs and their clients increasingly expect same-day (even instant) transactions, the ACH network has evolved to include a Same-Day ACH option.

According to Nacha, the volume of Same-Day ACH payments is expected to exceed $1 billion in 2024.

Same-Day ACH means that businesses no longer need to wait an average of 3-5 days for ACH transactions to process. Instead, they can leverage faster, same-day payment capabilities that help improve cash flow, enhance client experiences, and streamline financial operations.  

Let’s explore how Same-Day ACH works, what it offers, and how your MSP can use it to serve clients better.

What is Same-Day ACH & How Does it Work?

Same-Day ACH is an expedited version of the standard ACH system. Simply put, it enables faster processing of electronic payments. Unlike standard ACH payments, which generally take 3-5 business days to complete, Same-Day ACH transactions settle on the same business day – meaning faster access to funds.

Related reading: Understanding ACH vs. Credit Card Payments for MSPs

What are the cutoff times and transaction limits?

The ACH network, managed by Nacha, designates specific cutoff times for Same-Day ACH, so both the sender and receiver need to initiate their transactions before these deadlines. Typically, the ACH network offers three processing windows throughout the day, with the final cutoff in the late afternoon (eastern time). This ensures that even transactions submitted later in the business day can still qualify for same-day processing.

With FlexPoint, the daily Same-day ACH cutoff time is 4:00PM Eastern Time.

Same-Day ACH transactions do have a dollar limit – currently capped at $1 million per transaction. This cap allows businesses to make higher-value payments on the same day but keeps the system within manageable, reliable limits.

Same-Day ACH vs. Standard ACH

The main difference between Same-Day ACH and Standard ACH is how quickly you have access to funds. Traditional ACH typically involves three to five days of processing, during which funds are on hold.  

With Same-Day ACH, payments process much faster, which eliminates delays and gives you quicker access to funds. For MSPs, this is a significant benefit, as it allows you to offer faster payroll processing, emergency fund disbursements, and other high-speed payment solutions. Because of these increased benefits, Same-Day ACH is usually higher price than standard ACH.

Implementing Same-Day ACH for MSPs

For MSPs, Same-Day ACH implementation involves careful planning and setup to ensure a smooth integration into existing billing operations. Here’s what to expect when getting started:

1. Evaluate Your Payment Processing Partner: Before you can implement Same-Day ACH, confirm that your current payment processor or payment automation platform supports it. Not all options offer Same-Day ACH, so it’s essential to work with a provider that does. Make sure they offer clear tools, reliable support, and transparent fees specific to Same-Day ACH transactions.

2. Understand Cutoff Times and Transaction Limits: Familiarize yourself with the ACH network’s cutoff times and transaction limits for Same-Day ACH. Typically, there are three processing windows throughout the day, with a cutoff in the late afternoon. Knowing this information helps you schedule payments strategically and minimize any potential delays.

3. Educate Your Financial Team: Ensure that your finance team understands how to use Same-Day ACH, including when it’s best to initiate transactions to meet deadlines and any additional fees that may apply. Training your team on these nuances will help streamline the payment process and ensure it’s used effectively.

4. Communicate Changes to Key Stakeholders: If implementing Same-Day ACH will affect vendors, employees, or clients, communicate the change clearly. Let them know when they can expect faster payments and any changes in timelines. This transparency will help build trust and set expectations for faster, more reliable transactions.

5. Integrate Same-Day ACH into Your Billing Systems: Integrate Same-Day ACH capabilities into your billing and payroll systems if applicable. Many MSPs use automated payments software, so ensure that your systems are configured to schedule and track Same-Day ACH transactions without manual intervention.

6. Monitor and Adjust as Needed: Once Same-Day ACH is in place, monitor its usage and impact on your operations. Track processing times, cash flow improvements, and any challenges encountered during transactions. Use this data to adjust your approach and improve the efficiency and timing of Same-Day ACH usage.

7. Consider Fees and Budgeting: Same-Day ACH transactions often come with additional fees. Factor these costs into your budgeting process and evaluate how the speed and convenience of Same-Day ACH balance out against these expenses. Look for a payment automation platform that includes a number of Same-Day ACH transactions in your monthly subscription, like FlexPoint.

Same-Day ACH Transactions with FlexPoint

For MSPs looking to utilize Same-Day ACH in their billing operations, FlexPoint’s payment automation solution can be a game-changer. FlexPoint is designed to make payment processing simple, secure, and swift.

FlexPoint’s dashboard allows MSPs to initiate Same-Day ACH transactions and monitor payment status in real time, making it easier to manage cash flow and meet pressing financial needs. With FlexPoint Same-Day ACH, you can also mitigate your ACH returns through our robust risk engine.  

Texas-based MSP, Excellent Networks, switched to FlexPoint for its ACH payment capabilities and AutoPay functionality. This switch resulted in 80% faster payments and Excellent Networks saved over $10,000 a year in credit card fees.  

By understanding the ins and outs of Same-Day ACH and using a robust platform like FlexPoint, you can gain control over cash flow, reduce payment delays, and keep operations moving smoothly.  

Maximize cash flow with FlexPoint’s Same-Day ACH solutions. Reach out today for a personalized demo of our payment platform.