An Accounts Receivable Entry is an application of the automated clearing house (ACH) network, the same network that allows for Direct Deposit. When you mail a check for payment, or drop one into a drop box, the company may convert the check into an ACH (electronic) entry. This application is most commonly used by organizations that regularly receive a high volume of checks such as credit card, insurance, and utility companies.
An organization may ‘convert’ your check simply by notifying you prior to payment. According to Federal regulations, no written authorization is required. The ACH item will appear in the electronic transactions portion of your statement and the statement entry will include your check number and the company name.
You may place stop payments on these items, but you must give the financial institution reasonable opportunity to act on the stop payment before it is processed. The time it takes for the ACH entry to reach your financial institution is much shorter than for a check, so you must act quickly if a stop payment is necessary on an ACH item.
If a stop payment is placed on the check and the ACH item is presented in the place of the check, a financial institution may pay the item in error due to common computer system issues. But don’t worry . . . just notify your financial institution and they can return the ACH item on which the stop payment was placed.