Payment Run Scheduling

A payment run is the batch process by which the AP team or finance function processes a group of due invoices together and generates a payment file to be submitted to the bank. Payment runs are typically scheduled on a fixed cadence -- weekly, fortnightly, or monthly -- to create predictability for both the AP team and for suppliers who plan their own cash flow around expected payment dates.

The payment run schedule has a direct impact on on-time payment performance. If a business runs payments weekly on Thursday, invoices due between Friday and the following Thursday will be paid on the Thursday payment run. An invoice due on Friday that was approved on Monday will be paid on Thursday -- three days after the due date. If the same business runs payments twice weekly (Monday and Thursday), the same invoice due on Friday is paid on Monday -- only one business day late. Increasing payment run frequency reduces average lateness for all invoices due between runs.

Designing the payment run process

A well-designed payment run process includes: an AP aging review before the run to identify all invoices due within the next payment cycle; a payment file generated by the accounting system listing all selected invoices, amounts, and payee bank details; a financial controller or authorised signatory review and approval of the payment file; bank upload and transmission; and confirmation that the payments have been sent and reconciliation of the bank account against the submitted file after clearing.

The financial controller review is a critical control step. The reviewer should check: that no payees are unfamiliar; that no bank account details have recently changed for high-value payees; that the total payment file amount is consistent with the expected AP liability being cleared; and that no invoices are being paid twice. This review typically takes 15 to 30 minutes for a mid-size payment run but is the last human gate before significant funds leave the business's bank account.

Payment run frequency and cash flow

Payment run frequency has a meaningful impact on cash flow. A weekly payment run accelerates cash outflow compared to a fortnightly run -- on average, invoices are paid 3.5 days earlier in a weekly run than in a fortnightly run. For a business with AU$2 million in monthly AP spend, this difference represents approximately AU$230,000 in additional average cash outflow per week under a weekly run compared to fortnightly. For businesses with tight cash positions, moving from weekly to fortnightly payment runs can meaningfully improve working capital position without changing supplier relationships -- as long as the fortnightly run still pays invoices within their terms.