ACH Payment Authorization Template

If you plan on processing payments directly from someone’s bank account using an ACH network, you need an ACH authorization form.

What Is an ACH Authorization Form?

This form is a legally binding document that permits you to take money from someone’s bank account. It outlines payment terms between a merchant or vendor and a customer or consumer.

The ACH is the Automated Clearinghouse, an electronic settlement system network specifically for bank payments to be cleared for businesses. A business can initiate this type of payment method after a customer has given authorization. A business can’t initiate payment except ‌when someone creates the transaction. If you own a business, this is the way to ensure you get paid according to predetermined terms without waiting for your customers to remember to make their payments on time.

How to Use an ACH Authorization Form

Common circumstances to use an ACH authorization form include when products are purchased on a regular basis, recurring payments for services, membership renewals, subscriptions, or payment plans like loan repayments. In any situation where someone wants to set up a recurring payment taken directly from their account, you can use an ACH form. 

Terms to Include in an ACH Authorization 

With an ACH payment, you need to include:

1. State whether the payment will be a one-time payment or recurring payment. Most of the time, an ACH form is used for recurring payments where a client, vendor, or customer gives you legal permission to access their account information at regular intervals and withdraw funds from their account.
2. The payment authorization must list the parties involved. This should include the payee and the person paying, their contact information, the law under which the ACH payment form is authorized, the start date, and an end date if applicable. 
3. Next comes the billing information. This is where you will list the account holder’s address, contact information, and phone. 
4. Then add the bank details, including the type of account being used for the services, the name of the bank, account number, and routing number. 
5. You also need to specify for what purpose the authorization is granted in exchange for monthly goods or services. You should also specify the exact amount of money when it will withdraw from the account and on what date or day of the month. For example, on the last day of the month or every month on the 30th, whichever comes first. 
6. Finally, include the authorization and signatures. You can also include a section allowing the merchant to try a second payment process if the first transaction doesn’t go through. Then include permission to continue trying for up to 30 days after the first attempt has failed, after which an account might be closed, or other punitive measures are taken. Don’t forget to include the date alongside the signature.

How to write an ACH Authorization Form

If you are ready to write an ACH form, follow these steps: 

Download a free ACH authorization form template

Make things easier by using a sample ACH authorization form. You can easily download a Word or PDF document that has the basic parts you need for a one-time payment or a recurring payment from someone’s bank account. Starting with a template makes it much easier to verify that you included the right components in your ACH authorization form.

Verify it has all the information you need

This leads directly to the next step, making sure the ACH authorization form template has all the parts you need. For example, if you are a gym owner and you are using a blank ACH authorization form template for people to set up recurring monthly fee payments from their checking or savings account, make sure the sample template you download includes a section for bank details, billing information, authorization, and a signature.

Fill in all the ‌required information

Fill in all the necessary information. With a vendor ACH authorization form template, for example, you would need to be present with the vendor or send the blank ACH authorization form template for them to sign electronically. You would need them to fill in the necessary information, including their bank details like the routing number and the account number.

Have both parties sign it

Finally, have both parties sign it. With an ACH authorization form pdf, you can easily add security features that keep the document locked so that only people with the appropriate passwords can access the information. This gives vendors and customers peace of mind if the document has to be signed electronically because it guarantees other people won’t be able to open it and access personal or business banking details.

Sample ACH Authorization Form (Free Word & PDF Files)

To save time and efforts, you can always download this sample ACH Authorization form that will help you to draft a contract. All you have to do is just fill in all the necessary fields.

Disclaimer

When you use this ACH agreement pdf, you assume all responsibility and liability. Lawrina retains no legal responsibility for the legal document’s accuracy, reliability, or functionality.

The unprofessional use of this legal form or other templates on this website could result in direct or indirect losses or damages. By downloading, printing, or using this agreement, you accept all liability for any loss or damage you may suffer.