Supplier payment runs: outsource the prep, keep approval

Key takeaways

The supplier payment run process is a textbook split. A provider can prepare the run: select due invoices, check they are approved and matched, and build the payment file. Approval of the run, release of payments and any change to supplier bank details stay in-house, because that is where fraud and errors cost real money.

• Provider: select due invoices, check matching, build the run.
• Owner: approve the run and release payments.
• Bank detail changes: verify by phone on a known number.
• Run on a fixed day each week or fortnight.

What are the steps in a supplier payment run?

A payment run picks up approved invoices due by the run date, checks them against orders and deliveries, nets off any credits, builds a payment file for the bank, gets approval, releases the payments and sends remittances. A fixed weekly or fortnightly day keeps suppliers informed and cuts ad hoc requests.

• Which business processes should you outsource?
• Purchase-to-pay process: faster, cleaner supplier payments

Which stages can a provider prepare?

Selecting due invoices, checking approvals and three-way matching, applying credits, flagging anything unusual and building the payment file or bank upload. The provider should send the run with a short exceptions list: new suppliers, changed bank details, unusually large amounts and anything paid early.

• Three-way matching: stop paying invoices you should not
• In-house vs outsourced accounts payable

Why do approval and bank detail changes stay in-house?

Because they are where money leaves the business. Mandate fraud, where a fake email asks you to update a supplier's bank details, is one of the most common frauds against UK businesses. The control is simple: verify any change by calling the supplier on a number you already hold, not one in the email. A named person approves the run and releases the payment.

• The four eyes principle for small businesses
• Processes with sensitive data: can they be outsourced?

When should the whole run stay in-house?

When you pay only a handful of suppliers a month, the preparation is too small to outsource on its own; bundle it with invoice processing or keep it. Also keep it if your banking set-up cannot give a provider preparation access without payment rights.

• How much volume makes a process worth outsourcing?
• System access for outsourced teams: fast but safe

What does this look like in practice?

A pattern we see: once payment runs move to a fixed day with a prepared pack, supplier chasing calls drop because suppliers know when they will be paid. The owner's time on payments falls to a short approval.

• See client work
• BPO Solutions for UK businesses

Payment run checklist

Confirm these every run.

• Only approved, matched invoices included.
• Credits applied before payment.
• New suppliers and changed details flagged.
• Bank detail changes verified by phone.
• Run approved by a named person.
• Remittances sent after release.

• Finance processes to outsource, and the ones to keep
• Outsource, split, fix or keep: four process verdicts

Next step

Tell us how often you pay suppliers and who prepares the run. We will show you how we would split it and which controls to add.