ACH Authorization Form Overview and FAQs

If your customers want to pay their open invoices through their bank account (ACH payment) instead of using a credit/debit card, federal banking regulations require them to provide their written authorization for you to do so.

An ACH (Automated Clearing House) Authorization Form is a document that allows a business like yours to debit or credit a customer’s bank account electronically. It stores your customer's authorization in writing, protecting your business legally and giving customers clarity on what they're agreeing to before any money moves.

A signed authorization form reduces the risk of payment disputes, chargebacks, and compliance headaches down the road. It also makes it easier to prove prior authorization if a customer ever questions a charge.

A sample ACH Authorization Form can be found here. Feel free to download it and fill it out with your customers.

Before You Start

Here are a few things to know before you continue:

• We recommend that only Account Owners fill out the ACH Authorization Form since it's a legally binding document.
• You must be signed up for ServiceCore Pay to accept ACH payments through ServiceCore.
• Before sharing the form with customers, fill out the sections that contain your business information (covered in the instructions below).
• You must keep signed authorization forms on file for a specific amount of time required by local and federal regulations.
  • For USA businesses, this is usually 2 years after the last transaction is completed. Please check your local state laws to confirm!
  • For Canadian business, this is usually 2 years after the last transaction is completed. 
    • However, the Canada Revenue Agency (CRA) generally requires businesses to keep financial records for 6 years. Please check your local provincial laws to confirm!
• Your customer may be able to e-sign the ACH Authorization Form as long as it complies with legal standards such as the ESIGN Act in the USA and PAD rules in Canada.

Purpose of the ACH Authorization Form

The ACH Authorization Form exists to meet banking compliance requirements and protect both you and your customers. 

By signing it, your customer formally authorizes you to initiate electronic transactions to and from their bank account. Without a signed form on file, you don't have the legal authorization to debit your customer's bank account via ACH. 

TIP: Always collect a completed and signed form from your customer before initiating any ACH payment.

Authorized transactions can include:

• Recurring payments, like monthly service fees.
• One-time payments, like a single job or rental charge.

Fill Out the ACH Authorization Form

Both you and your customer need to fill out various sections of the ACH Authorization Form. What sections you and your customer have to fill out depend on the ACH Authorization Form you decide to use. 

Please check your local and federal regulations to confirm what form(s) you're allowed to use and whether you can send it to your customer to sign electronically or if they have to physically sign the paper document.

Please Note: The instructions below assume that you are using this sample ACH Authorization Form. 

Your Business Information

To fill out the ACH Authorization form, follow the instructions below:

1. Add your full, legal Business Name at the top.
2. Add your Business Address at the top.
3. Add your Contact Information at the top.
   
   
4. Check whether you want to request authorization from your customer for a One-Time Payment or a Recurring Payment.
5. Enter the Amount to Withdraw. This will either be the exact amount for a one-time payment or a clear, agreed-upon variable/formula for recurring payments.
6. Enter the Transaction Date(s). This will either be the exact date(s) for a one-time payment or a clear, agreed-upon schedule for recurring payments.
7. Enter the Description of Payment(s). This is a clear, concise purpose for the payment(s) you expect to collect from your customer.
   
    
8. Add your full, legal business name to the Authorization Statement section in both places.
9. Add the number of days before the next transaction that you require your customer to cancel their authorization in. This will be a numerical value, like 7. Enter a number of days even if this form is for a one-time payment.
   
   
10. Add your Business Email Address at the bottom.
11. Add your Business Fax Number (if applicable) at the bottom.
    
    

You can now send the form to your customer so they can fill out their sections.

Your Customer's Information

When you're ready to send your customer the ACH Authorization Form, you may want to also share this article with them so they can follow the instructions below:

1. Add your personal Account Holder Information at the top.
   
   
2. Add your Bank Account Information at the top. This will be the bank account that your payments are debited from.
   
   
3. Sign and date the form.
   
   

You can now send the form back to the business that originally sent it to you.

Store the ACH Authorization Form Securely

After your customer fills out their portion and sends the form back to you, fill out the For Office Use Only section at the bottom before filing it.

This acts as confirmation of your receipt of the signed form. You'll now need to store it securely to protect your customer's sensitive information. 

If your customer e-signed a digital document, use an encrypted digital storage location like ServiceCore. You can easily upload the signed form as an Attachment to your customer's profile.

If your customer signed a physical paper document, you can scan and upload it to an encrypted digital storage location like ServiceCore. If you want to retain the physical document, make sure you comply with data protection laws like GDPR or CCPA when applicable. To dispose of the physical document, you'll need to shred it.

TIP: Make sure to keep the signed form for the duration required by your local and federal regulations.

Once the form has been signed by your customer and you've securely filed it, you can now use the information provided on the form to initiate the ACH transaction through ServiceCore. 

TIP: Verify all details before submitting the payment to avoid errors with the transaction.

If the customer wishes to update or cancel their authorization, they must provide your business with written notice within the time period specified on the original form they signed. 

We suggest providing your customers with instructions on how they can submit those changes to your business, such as contacting your customer service channel(s) or sending you a new, signed form.

You'll also want to clearly communicate to your customers when the payments will occur, how much they can expect to be debited from their bank account, and any fees/penalties for insufficient funds. 

Frequently Asked Questions (FAQs)

These FAQs address common questions and quick clarifications to help you use this feature with confidence.

Is a physical signature required or can the ACH Authorization Form be signed electronically?

An electronic signature is valid as long as it complies with e-signature laws, such as the ESIGN Act in the United States.

How long is an ACH Authorization Form valid for?

For recurring payments, the authorization remains valid until the customer cancels it in writing. For one-time payments, it's valid until the transaction is completed.

Using an ACH Authorization Form is a straightforward way to streamline payments while ensuring compliance and security. 

If you have any questions, please reach out to our Support team through the chat widget on the bottom of this page or by sending an email to ServiceCorePay@servicecore.com!