ACH transfer of funds on invoice

[bbutler222]

Is there a reason why an ACH payment on an invoice that was paid on 9/19 won't be transferred until 9/25? Did I miss the memo that states it takes that long on ACH payments?

[TheRealChipA · Accepted solution]

Hi @bbutler222. ACH has always been this way.  This is not a function of Square, but of the Automated Clearing House (ACH).  Anyone who uses ACH experiences the same “delay.”

Basically, it works just like a check, only electronically.  The delay is due to a few factors, but Square doesn’t have the money immediately after an invoice is paid via ACH.  They have requested your customer’s bank for the funds, which have been “approved” by that bank.  Once Square receives the money electronically, they will transfer it to you.

Let me know if you have any other questions.

[IHSystems]

That seems odd to me as I pay vendors and others via ach or electronic check and it takes 1 business day for them to collect money from my account. Literally just did this yesterday and the funds left my account this morning. So it still seems suspect to me.

[TheRealChipA]

That happens sometimes. It depends on the financial institutions that are involved.

I do ACH to my landlord every month. The money comes out account on the date I specify. He’s seen it take up to 3 days to post at his bank. But he knows it has been sent on time because he gets a notice that it is in transit. 

I have another vendor I pay via ACH who sees it in their account the next day. 

Not everything or everyone works the same way on this. Different doesn’t always mean suspect. This inconsistency is one reason the the US needs to replace the system with something like the EU has with TIPS. Over there everything is nearly instantaneous. I hear the Fed is working on it but getting resistance from many banks. Go figure. Lol