Bill Pay vs. ACH: Which Is Best for Your Organization?

Managing the finances of a church, school, business, or nonprofit can feel like a balancing act! When it comes time to pay your insurance premiums, you generally have two main electronic options: Bank Bill Pay and ACH (Automated Clearing House).

While both are technically “electronic,” they work very differently behind the scenes. Understanding these differences can help you avoid late fees, simplify your bookkeeping, and ensure your coverage never lapses.

1. What is Bank Bill Pay?

Bank Bill Pay is a service offered by your bank where you tell the bank to send a payment to a vendor (like your insurance carrier). For Bank Bill Pay, you log in to your bank portal, enter the payee’s name and account number, and set an amount.

However, many people don’t realize that for many insurance carriers, the bank may actually print and mail a physical paper check on your behalf. Because a physical check might be in the mail, “paying” the bill on the due date via Bill Pay could result in a late payment. To try to make sure this doesn’t happen, you may want to schedule these 5–7 days in advance to ensure the check arrives and is processed by the carrier’s lockbox in time.

2. What is ACH?

ACH is a direct, bank-to-bank transfer. In the insurance world, this is usually set up as an Automatic Debit (often called “Auto-Pay”) where the insurance carrier “pulls” the funds from your account on the due date. For ACH, you provide your routing and account numbers to the insurance company once. They handle the rest automatically. ACH has a more “set it and forget it” approach, which means that once it’s set up, you don’t have to log in every month to initiate a payment. The exact premium amount is pulled on the exact due date. Since it’s a 100% digital transfer, there is no risk of a check being lost in the mail or delayed by the postal service.

We generally recommend ACH for our clients because it is the most secure and reliable method.

• No Late Fees: Since the carrier initiates the pull on the due date, your payment is never late.

• Efficiency: It frees up your treasurer or administrator from having to remember monthly payment dates or manual data entry.

• Accuracy: If your premium adjusts (due to an endorsement or audit), ACH automatically pulls the correct new amount, whereas Bill Pay requires you to manually update the payment amount in your bank portal.

However, Bill Pay might be the right choice if your organization has very strict internal controls.

• Manual Control: If your organization requires a board member or treasurer to manually authorize every single exit of funds each month, Bill Pay gives you that “trigger” control.

• Tight Cash Flow: If you need to wait until the very last second to ensure a specific deposit has cleared before sending a payment, Bill Pay allows you to hold that “send” button.

If you choose to stay with Bank Bill Pay, always check your bank statement to see if your bank is mailing a physical check. If they are, we strongly recommend scheduling your payment to be sent at least 10 days before the due date. This accounts for mail delays and the time it takes for a human at the insurance company to open and scan a physical check.