Monthly Vendor Payment Run

Approved payment batch submitted, all payments initiated with confirmation IDs. Invoices reconciled and marked paid. Monthly AP run report distributed.

Before you start

Vendors approved with net-payment terms
Approval thresholds for payments above limits
Bank or AP system access
Approved invoices for the period
Vendor master list (banking, payment terms, contact)
Cash position and available payment runway

The steps

Pull all approved invoices for the cycle — Filter for invoices with: status = approved, payment due in the next 7 days, vendor active. Cross-check against POs or contracts where applicable. Flag any invoice without backing PO above threshold.
Validate vendor and banking details — For each invoice, verify the vendor's banking info matches the latest signed verification. Wire fraud frequently uses changed banking info — never trust an emailed change without secondary verification (phone call, signed letter).
Group by payment method — Group: ACH (default for US domestic), wire (large, time-sensitive, or international), check (rare, declining), card (corporate spend). Different methods have different cutoffs and fees.
Check cash position and stagger if needed — Compare total payment run to available cash. If insufficient runway, stagger by priority: critical vendors (utilities, payroll-related) first, then standard. Communicate any delay to AP-affected vendors proactively.
Submit batch for approval — Run total above threshold requires CFO/Finance approval. Submit batch with: total amount, vendor count, breakout by method, top 5 vendors by amount. Get sign-off before initiating any payments.
Initiate payments and track confirmations — Initiate per method. Track confirmation IDs. Most ACH settles in 1-3 business days; wires same-day to next-day. Confirm receipt with vendor for high-value payments.
Reconcile and update accounting — Once payments clear, reconcile to invoices. Update accounting: mark invoices paid, post to expense accounts, attach payment confirmations. Generate the monthly AP run report.

If it goes wrong

Wire fraud — vendor banking changed via spoofed email

Hard-fail: any banking change requires verbal confirmation via known vendor phone number. Train AP team on this. The phone call costs 5 minutes; the fraud costs $50k+.

Duplicate payment to a vendor

Always check for prior payment in the period before initiating. AP system should flag duplicates by invoice number; if not, add manual check.

Cash shortfall mid-run

Stop the run, stagger by criticality, communicate proactively to affected vendors. Don't bounce payments — that damages vendor relationships harder than a 3-day delay with notice.

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