What is an Account Receivable Entry (ARC) primarily used for?

An Account Receivable Entry (ARC) is primarily used to initiate a single-entry debit to a consumer account. This entry is part of the Automated Clearing House (ACH) system, which often facilitates transactions for businesses that wish to collect payments directly from consumers' bank accounts. The single-entry debit is typically a one-time charge for a specific payment, which allows a business to streamline its invoicing process and quickly collect funds owed to it.

In this context, the focus is on the nature of ARC as a mechanism specifically designed for the efficient handling of receivables. This aspect is crucial for businesses that rely on regular cash flow from their customers, as it simplifies the payment process and reduces the likelihood of delays in receiving payments. Thus, the use of ARC plays a significant role in managing accounts receivable effectively.