In business, details may mean costs or savings that add up quickly: How you move money matters a lot. Whether paying suppliers, collecting from customers, or handling payroll, your choice between wire transfers and Automated Clearing House (ACH) transfers can impact your cash flow, costs, and security. Both methods move money electronically, but they work differently. Here’s what you need to know to make the best choice for your small business.

When Do You Need the Money to Arrive?

Wire transfers are ideal for time-sensitive payments. The money often moves the same day, sometimes within hours, and it’s hard to take back once it’s sent. This makes wires perfect for urgent situations like closing on real estate, paying suppliers quickly, or making large purchases when you can’t wait. ACH transfers move more slowly, typically taking one to three business days. While Same Day ACH exists, it’s still not as fast as a wire transfer. ACH works best for regular payments like payroll or bills that you know about in advance.

What’s Your Budget for Moving Money?

Wire transfers cost more, usually between $15 and $30 per transaction, and even higher for international payments. If your business processes wire transfers frequently (several times a week or more), these fees can add up fast. ACH transfers are much cheaper, sometimes costing just pennies per transaction, or may even be free with certain bank accounts or payment services. For businesses that make lots of smaller payments, ACH is much easier on your budget.

How Much Money Are You Moving?

Wire transfers work well for large amounts, typically over $10,000, because they’re secure and fast. Banks often set higher limits for wire transfers, making them ideal for major purchases or moving large sums. While ACH can technically support transactions up to $1 million, it’s most commonly used for smaller, recurring payments, typically under $10,000, where cost and automation matter more than speed. Be sure to check your bank’s ACH limits if you plan to move larger amounts this way.

What Happens if Something Goes Wrong?

Both methods use strong security, such as encryption, multifactor authentication, and identity verification steps. But each handles mistakes differently. Wire transfers are typically final once processed; if you send money to the wrong account, it can be difficult to recover. ACH transfers, while also secure, often provide more protection through fraud monitoring, error resolution processes, and time windows for reversing unauthorized payments.

How Automated Do You Need to Be?

ACH transfers often integrate smoothly with accounting software and payment systems, making automatic payments easy and reducing paperwork. Wire transfers typically require more manual work for each transaction and don’t connect as seamlessly with business systems. This means more hands-on time entering payment details and extra effort reconciling your accounts.

Both wire and ACH transfers have their place in your business toolkit. ACH is usually best for regular payments that are less expensive (costing just a few cents) and easily automated. Wire transfers work better when speed and confirmation are necessary. By understanding the strengths of each method, your business can move money more efficiently, spend less on fees, and stay financially flexible.

Want to optimize your business payment processes? Learn how our Treasury Management and ACH solutions can save you time and money. Contact us today!