Certified Compensation Professional (CCP) Electronic Transactions Association (ETA) Practice Exam

Automatic Check Handling refers to the processes and systems involved in the automatic processing of checks, particularly through electronic means. This concept primarily aligns with the functions of an Automated Clearing House (ACH), which facilitates the movement of money and payment instructions between banks and financial institutions. Through ACH transactions, funds are automatically transferred electronically between bank accounts, thereby streamlining check handling and reducing the need for manual processing or paper-based transactions.

The key distinction of Automatic Check Handling lies in its reliance on automation to enhance efficiency, minimize human error, and speed up the transaction process. This is essential for businesses and organizations that handle a large volume of payments, as it allows them to manage cash flow and accounting more effectively. By using ACH functions, organizations can ensure timely payments without the constraints associated with traditional check writing or manual processing.