Simplifying U.S. exports with ACH/ACE: A comprehensive guide

For Canadian exporters to the United States, efficient customs processes are critical to success, especially with the recent tariff developments impacting both nations.

The Automated Clearing House (ACH) and Automated Commercial Environment (ACE) systems are designed to streamline these processes, making it easier and more efficient to buy and sell internationally.

This article provides a comprehensive guide to understanding and benefiting from ACH and ACE, and how to sign up for the services to facilitate payments across borders.

Understanding ACH and ACE

Exporters who want to access the U.S. market stand a better chance of succeeding if they are able to use the ACH system and if they access the ACE portal.  

What’s ACH?

ACH is an electronic network for transferring funds. It allows businesses to send and receive money efficiently and securely. It’s widely used for recurring payments, payroll and bill settlements. When a company pays an employee in Canada with an electronic funds transfer (EFT) that’s the equivalent of an ACH.

ACH can also be used to pay U.S. Customs and Border Protection (CBP) duties, taxes and fees. They can happen in the form of credits and debits although the credit version requires exporters to have a U.S. bank account.

“Most banks that have a U.S. presence will facilitate the opening of an account from Canada,” says Someyita Bictogo, a relationship manager at Export Development Canada (EDC). But to send payments through secure email, you need to provide personal identification.

Although it can be used internationally, ACH is primarily used for domestic transfers within the U.S. 

Benefits of ACH:

• Cost-effectiveness: ACH transactions are generally cheaper — often, free — than credit card payments or wire transfers. “If your broker or someone else is paying your duty, they’re giving you disbursement fees or remittance fees on top of your duty. By paying your duty directly, you cut out those fees, [and] with the increased duties, everybody's looking for a way to save a little money,” says Breanna Leininger, vice-president of U.S. operations for Pacific Custom Brokers Inc.
• Reliability: ACH supports structured, recurring payments, making it ideal for businesses. According to Leininger, “If you pair your ACH with things, like the periodic monthly statement, it gives you a dependable pay date. So once a month, you have your payment for all your duties, rather than having to do those submissions every single day, or every single time you have an entry.” It’s also a good way not to miss payments, she says. But processing times can be slower than with other forms of payment.
• Security: ACH transfers come with strong protections under U.S. federal law. They also offer greater flexibility for the reversal of a transaction because they’re processed in batches over several days, often providing a window of time for reversal. 

What’s ACE?

The Automated Commercial Environment (ACE) portal automates and streamlines the importation process and is managed by CBP. It serves as a one-stop shop for all trade processing, reducing paperwork and improving compliance. It allows businesses to report and manage their import and export activities digitally, resulting in a more seamless customs clearance process. Leininger says it’s good idea to have an account to show your interaction with customs and she says the reporting tools within it are valuable.

Benefits of ACE:

• Automation: ACE automates the submission of import data, reducing the likelihood of manual errors.
• Reduced paperwork: ACE eliminates the need for multiple forms, thereby simplifying the customs process.
• Improved compliance: ACE helps businesses comply with U.S. customs regulations, preventing penalties.
• Predictability: As this is a system run by CBP, it gives the exporter the benefit of predictability in an export market whose trade policies have been changing quickly in recent weeks. 
   

• Faster processing: By electronically submitting paperwork, exporters can speed up processing at ports of entry.
• Better visibility: ACE makes it easier to monitor cargo status.
• More foolproof: Because you can access your information electronically after you file, ACE allows you to correct mistakes more easily because it can be done online. 

Benefits of using ACH/ACE for Canadian exporters

Efficiency and automation

ACH and ACE automate customs processes, reducing the need for manual intervention and minimizing errors. Tasks such as payment of duties and submission of export data are simplified, saving time and effort.

Cost savings

By reducing administrative costs and advising the exporter of potential savings on tariffs and duties, ACH and ACE offer significant financial benefits. Note: There can be additional resources, such as software, required to set up an ACE account.

“ACE serves to improve the new norms being set up between Canada and the U.S. concerning importation and exportation, by streamlining the very tedious procedures involved in customs,” says Victoria Shnaider, chief operating officer and sales director at KidsVip, a Canadian manufacturer of remote-controlled, ride-on vehicles for children.

“This might lead to simpler processes and increased shipment visibility status, but it is a cumbersome process to learn and businesses often need third-party software, or a customs broker, to use ACE to the fullest,” Shnaider says. “Most businesses use ACE, along with already existing enterprise resource planning systems or logistics software, to streamline compliance and reporting.”

Leininger says ACE is “really difficult to use and it’s really difficult to make sure that you file entries in a timely way because there’s so much information you need. But as far as having insight and control, it is really beneficial to have the ACE portal.”

CBP provides training guidance on the ACE portal.

Improved compliance

Enhanced ability to comply with U.S. customs regulations helps avoid penalties and ensures smooth operations.

Real-time tracking and reporting

Access to real-time data on shipments and payments improves transparency and decision-making.

Hurdles to getting signed up

Requirement of a U.S. bank account

A bank account in the U.S. is necessary for ACH transactions. Some banks will allow Canadian businesses to open a U.S. bank account, but not all will facilitate this remotely. To set up a U.S. account, sole proprietors can use their social insurance number (SIN) instead of an employer identification number (EIN), which is a unique identifier assigned by the Internal Revenue Service (IRS) to businesses operating in the U.S. For commercial accounts, they must have an EIN or tax ID.

Some Canadian banks that operate in the U.S. offer cross-border banking services that will allow you to move money between your Canadian and U.S. business accounts online with no additional fees. These accounts also make it easy to receive U.S. payments and deposit U.S. cheques electronically. Some also offer foreign exchange and wire payment services, cashier’s cheques and international drafts in major foreign currencies. 

Understanding the application process for ACH & ACE

The application process for ACE and ACH involves several steps, including completing forms and providing mandatory documentation:

Step 1: Prepare your documentation

Required documents include tax ID numbers, bank account details and business information.

Step 2: Complete the ACH application

Fill out the ACH Debit Application (CBP Form 400) and ACH Credit Application (CBP Form 401) accurately.

Step 3: Submit your application

Submit the application to the appropriate CBP office via email or mail.

Step 4: CBP review and approval

CBP reviews the application, which typically takes a few weeks. Applicants should be prepared to address any issues that arise during the review process.

Step 5: Set up your ACE account

Create an ACE account and link it to your ACH account. Use the ACE portal to manage your trade activities and access various features.

Note: Common challenges to signing up for these accounts include understanding the requirements and ensuring all information is accurate. A customs broker can help with these challenges.

Expected timelines and tips for success

Timelines for ACH/ACE setup

The processing time for ACH and ACE applications varies, but it generally takes a few weeks. Factors such as completeness of documentation and responsiveness to CBP inquiries can affect the timeline.

Tips for a smooth setup

• Ensure all documentation is complete and accurate.
• Respond promptly to any CBP inquiries.
• Use resources and support from CBP and other organizations to navigate the process.

ACH & ACE streamline customs processes

Using ACH and ACE—especially in combination—can significantly streamline the customs process for Canadian exporters to the U.S. By automating payments and data submission, reducing paperwork and improving compliance, these systems can offer substantial benefits. Even though the ACE portal can be difficult to navigate, Canadian companies exporting to the U.S. should take advantage of the electronic services to enhance their efficiency and stay compliant in a changing trade environment. 

How EDC can help

For more information on ACH and ACE and how Export Development Canada (EDC) can help you prepare for future exporting to the U.S., visit our Export Help Hub and U.S. market intelligence page.  

For answers related specifically to tariffs, see our tariffs checklist.

To further reduce exporting risks during volatile times, EDC’s Foreign Exchange Facility Guarantee helps protect your profits from foreign exchange fluctuations and our credit insurance protects against non-payments.