All 21 Payment Runs questions
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What are common payment methods used in AP? What is a remittance advice? What is the journal entry when invoices are paid in a payment run? What is the difference between a manual payment and a scheduled payment run? How are invoices selected and prioritized in a payment run? How does an early-payment discount decision get evaluated? What controls should surround a payment run to prevent errors and fraud? What is a payment proposal (pre-run) and how is it reviewed? How are supplier credits and deductions applied within a payment run? What is the difference between ACH, wire, and check payments in terms of risk and cost?
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What is a payment file and how is it sent to the bank securely?

Beginner

Answer

A payment file (e.g., NACHA, ISO 20022 pain.001, BACS) contains the batch of payment instructions. It's transmitted to the bank through secure channels—host-to-host, SFTP, or an online banking portal—often with encryption and dual authorization. Secure handling prevents tampering that could redirect funds.
Real-world example The approved run generates an ISO 20022 file uploaded via the bank portal and released by a second authorizer.

Common follow-ups: What is ISO 20022? | Why is dual authorization on the file important?

Reconciliations Payment Runs Invoice Processing
All 21 Payment Runs questions