Factoring / Payments
What does ACH mean in trucking?
Plain-English explanation
ACH (Automated Clearing House) is the electronic payment network that processes direct bank transfers between financial institutions in the United States. In trucking, ACH is the standard method for freight payment -- brokers pay carriers (or carriers' factoring companies) via ACH transfer directly to the designated bank account, rather than sending physical checks. ACH transfers work by debiting the payer's bank account and crediting the receiver's account through the national ACH network operated by NACHA (the organization governing ACH). Standard ACH transfers settle in 1-3 business days; same-day ACH settles by end of the same business day for an additional fee. For carriers who do not use factoring, ACH payment arrives at the end of the broker's standard payment terms -- typically net-15, net-30, or net-45 days after delivery and invoice submission. The carrier waits the full payment term before funds hit their account. For carriers who factor, the factor advances a percentage of the invoice (commonly 90-97%) within 24-48 hours of invoice verification, then receives the full payment from the broker via ACH when the broker pays at their standard terms. ACH setup is part of the carrier packet: the carrier provides their bank routing number and account number (or their factoring company's bank information if they factor). Some carriers use a Notice of Assignment (NOA) to instruct the broker to pay the factoring company's ACH account rather than their own.
Factoring terms belong next to the invoice, POD, broker approval, reserve detail, and factoring agreement. A small wording difference can change the funding timeline.
Why it matters in trucking
ACH payment is how the freight economy moves money -- it is faster than checks, traceable, and directly integrated into carrier accounting systems. Carriers who set up ACH correctly from the beginning with every broker get paid faster and with less friction than those who receive paper checks. For carriers using factoring, ensuring the broker has the correct ACH information (the factor's bank details, not the carrier's) is critical to avoiding misdirected payments.
The business risk is usually hidden in timing: when the factor advances money, what happens if the debtor does not pay, and which documents must match.
Example in real use
A carrier completes a load for a broker with net-30 payment terms. The broker has the carrier's ACH information on file from the carrier packet setup. On day 30 after invoice receipt, the broker initiates an ACH payment. The funds appear in the carrier's bank account 1 business day later. No check was printed, no envelope mailed, no waiting for mail delivery. The carrier's accounting software (QuickBooks, etc.) records the deposit and matches it to the open invoice.
Common mistakes or confusion
- Providing personal bank account information for ACH instead of a business bank account -- freight payments should be received in a business account for cleaner accounting separation.
- Forgetting to update ACH information when switching banks or factoring companies -- a misdirected ACH payment can take several days to reverse and reissue.
- Not sending a Notice of Assignment when using factoring -- without the NOA, the broker may continue sending ACH to the carrier's bank instead of the factor's bank, creating a dispute over payment already received by the carrier.
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Sources and last updated
Factoring definitions describe general industry terms and contract structures. Specific rights and obligations depend on the factoring agreement in effect. See the sources page.
Last updated: 2026-05-08