A preauthorized check (PAC) system is a type of cash collection arrangement that may be more useful to firms such as insurance, finance, leasing, and mortgage companies. The PAC is a commercial instrument that is used to regularly transfer funds between demand deposit accounts. Through such a preauthorized indemnification agreement, the collecting firm is authorized to draw a check at specified intervals and in specified amounts on the customer’s demand deposit account. An example is a monthly mortgage payment. The PAC reduces mail, processing, and collection float and ensures that the company gets its money by a specified date.