Payment run
A scheduled batch in which a business pays a group of approved supplier invoices at once.
In short
- Most businesses run payments weekly or twice a month rather than paying invoices one by one.
- The run selects invoices due before the next run, plus any with discounts worth taking.
- It is a key control point: the payment file should be reviewed before release.
A payment run, or payment batch, is the regular moment when accounts payable pays suppliers. Instead of paying each invoice as it is approved, the team selects all invoices due before the next run, creates payments in one batch and sends them to the bank.
How a run works
- AP selects approved invoices due before the next scheduled run, plus any with early payment discounts.
- The selection is reviewed for cash availability, duplicates and unusual items.
- A payment file is created, usually for electronic funds transfer, sometimes with cheques or card payments.
- An authorized person, separate from the one who prepared it, approves the release in the bank's system.
- Payments are posted, and remittance advices are sent so suppliers know which invoices were paid.
Choosing a rhythm
Weekly runs keep suppliers happy and capture discounts. Twice-monthly or monthly runs save work and hold on to cash longer, but invoices due just after a run wait longer. Many businesses run weekly with an option for urgent off-cycle payments.
The control
The payment run is the last chance to stop a wrong payment. Checking for changed bank details, invoices without approval and payments to new suppliers before release prevents the most costly errors and frauds in AP.
Worked example
Thursday's run
Every Thursday, AP selects invoices due before the following Thursday. This week, 84 invoices totalling $286,400 qualify, plus three invoices with 2% discounts expiring Monday. The controller reviews the list, removes one supplier whose bank details changed on Tuesday pending a callback, and releases $281,150 by EFT.