Payments
Understanding ACH Debits and Credits for Your Business
A plain-language look at how ACH debit and credit activity appears in your records and what to keep on file.
BookKeepersHQ Editorial Team · 6 min read
Debits and credits, plainly
An ACH credit moves funds out from your account at your direction — the common method for paying a vendor. An ACH debit allows an authorized party to pull funds from your account, typically for a recurring arrangement you have approved.
The distinction matters administratively because the two create different records and different authorization requirements.
What to keep on file
For both directions, the same basic documentation applies:
- The authorization on record for the arrangement
- The schedule or frequency agreed with the counterparty
- Confirmation records for each transaction
- The invoice or agreement the activity relates to
Reconciling ACH activity
ACH items often post a day or more after they are initiated, so timing differences at period end are normal. Recording the initiation date alongside the settlement date makes those differences easy to explain rather than something to investigate.
This article is general information about back-office administration and is not accounting, tax or legal advice.
