Payment run checklist: How to plan and execute payments with fewer errors

A payment run consolidates your approved invoices into a single batch and pays your suppliers in one go. One missed bank detail validation, one invoice that skipped three-way matching, and you're dealing with a rejected BACS file, a delayed supplier, or worse.

This guide walks through a 15-step checklist from invoice verification to post-run reconciliation, built for UK and European finance teams paying suppliers at scale.

What is a payment run?

A payment run is a scheduled batch process where your finance team groups approved invoices, assigns the right payment method to each transaction (BACS, Faster Payments, CHAPS, or SEPA), and submits the full batch to the bank in a single file. Each method has different settlement speeds, costs, and recall options, which affect how you structure the batch and when you submit it.

Each run follows the same core sequence: verify invoices, confirm approvals, validate bank details, generate the payment file, submit, and reconcile. The checklist below breaks each of those stages into specific checks you can apply to your next run.

Which UK and EU payment methods apply to your payment run?

UK and European supplier runs usually use BACS, Faster Payments, CHAPS, and SEPA. The right choice depends on how quickly your supplier needs funds, what the payment costs are, and whether a recall is possible if something goes wrong.

Here's how each method works and when to use it.

BACS (Bankers' Automated Clearing Services) is the UK's standard scheme for low-cost, high-volume batch payments and the most common method for routine supplier runs. It operates on a three-day cycle: submit on Day 1, the file reaches the recipient bank on Day 2, and funds arrive on Day 3. BACS is cost-effective but unsuitable for urgent or same-day payments.

Faster Payments provides near-instant transfers, 24/7. Barclays payment guidance puts typical receipt within two hours, including evenings and weekends. Once sent, a Faster Payment usually cannot be recalled without the recipient's cooperation, so pre-submission validation matters.

CHAPS (Clearing House Automated Payment System) provides same-day settlement for high-value, time-critical payments. It's the most expensive of the main UK payment methods, so reserve it for payments where timing certainty justifies the cost.

SEPA (Single Euro Payments Area) covers euro-denominated payments across participating European countries. UK businesses can still use SEPA after Brexit, though some additional due diligence requirements may apply. Validate the required details (usually IBAN and BIC) before submission.

The method you choose affects your cut-off times, recall options, and file format requirements, all of which show up in the checklist steps below.

Payment run checklist: 15 steps across three phases

The value of formalising your payment run is that gaps tend to show up under pressure, when volume spikes, a supplier changes bank details, or a new team member runs the batch for the first time. Most finance teams have some version of this process already. These 15 steps cover pre-run, execution, and post-run phases.

Pre-run checks: Invoice verification, approvals, and bank detail validation

Step 1: Verify every invoice against the purchase order and goods receipt

Before any invoice enters the payment batch, confirm quantities, prices, and VAT details match the original purchase order and goods receipt note. Check that supplier information matches your master data records. This three-way matching process is your first line of defence against overpayments, duplicate invoices, and fraudulent submissions.

Step 2: Confirm approval status and delegated authority

Every invoice in the batch needs confirmed authorisation from someone with sufficient delegated authority for the amount. Flag any invoices that bypassed standard controls; they should not proceed without investigation.

Step 3: Validate supplier bank details

Verify all sort codes and account numbers (or IBAN and BIC for SEPA payments) against your approved supplier master file. Any recent bank detail change request must be checked through an independent channel, such as a phone call to a known contact number, not a reply to the same email thread. This reduces the risk of authorised push payment fraud. The scale of the problem is growing: the EBA-ECB fraud report recorded €2.5 billion in fraudulent EEA credit transfers in 2024, a 24% year-on-year increase, with manipulation of payers a growing share of the total.

Step 4: Check budget and cash flow adequacy

Verify that sufficient cleared funds exist in your designated accounts to cover the full batch. Review your cash flow forecast to confirm the run won't create a liquidity shortfall before your next inflow date. If your budgeting tool provides real-time visibility, check the impact on departmental budgets before submission.

Step 5: Schedule against payment method cut-off times

Plan your submission window around the method you need.

• BACS: Submit in line with your bank's BACS window for Day 3 settlement

• Faster Payments: Available 24/7 and usually near-instant

• CHAPS: Submit by your bank's cut-off, often in the early afternoon

• SEPA: Check cut-offs with your specific banking partner, because timings vary by bank and country

Missing a CHAPS or BACS cut-off pushes the payment to the next business day, so build a buffer into your scheduling, especially around bank holidays.

Payment execution: File generation, dual authorisation, and bank submission

Step 6: Generate the payment file in the correct bank format

Your system must support the right domestic bank file format for UK payments (Standard 18 remains the core BACS format) and SEPA XML ISO 20022 for European payments, plus any bank-specific variants. Review the batch summary report before you proceed: confirm the total payment value and transaction count match expectations, and check for any last-minute invoice holds or supplier disputes that should remove items from the batch.

Step 7: Apply dual authorisation

The person who prepares the payment batch should not be the same person who approves and submits it. Segregation of duties is a core control measure, but enforcing it manually often turns finance into the bottleneck for every payment. Configurable approval policies can enforce this segregation digitally, so no single person creates, approves, and pays the same invoice without requiring your finance team to manually gate every batch.

Step 8: Submit to the bank and confirm acceptance

Upload the payment file to your bank's secure portal within the required cut-off window. Check whether the bank returned any validation errors. Save bank confirmation reference numbers and log the submission time, date, and the authorised submitter's name for audit trail purposes.

Once the bank confirms acceptance, the batch is in transit and you can move to post-run reconciliation.

Post-run reconciliation: Supplier updates, compliance, and exception handling

Step 9: Reconcile bank transactions to the submitted batch

On the settlement date, complete your payment reconciliation by downloading bank transaction files and matching debits to the submitted payment file line by line. Identify any failed, rejected, or returned payments, and document all discrepancies.

Step 10: Update supplier accounts in your AP system

Mark invoices as paid, record bank payment reference numbers against each invoice for traceability, and archive under your document retention policy.

Step 11: Send remittance advice to suppliers

Confirm which invoices you have settled, the payment reference numbers, the amount paid, and the expected receipt date. Proactive remittance advice cuts down the "where's my payment?" emails and phone calls that eat into your team's week, especially as 30-day payment expectations tighten.

Step 12: Resolve failed payments

Identify rejection reason codes (incorrect bank details, closed account, or insufficient funds). Correct the underlying issue and reconfirm bank details through a verified channel if the rejection was detail-related. Notify affected suppliers of the delay, provide a revised payment date, and resubmit corrected payments in the next available run.

Step 13: Archive records for compliance

Archive payment run files, bank submission confirmations, and approval records. An automated audit trail simplifies this by capturing every approval and submission automatically. UK retention requirements are specific:

• HMRC requires PAYE record keeping for three years from the end of the relevant tax year, with penalties of up to £3,000 for inadequate records

• Under MTD VAT rules, you must maintain digital records and preserve digital links between systems

• Under Companies Act Section 388, private companies must retain accounting records for at least three years, while PLCs must retain them for six years

• Companies Act Section 386 requires day-to-day entries of all sums received and expended

Step 14: Report on payment run KPIs

Generate a summary showing total value, transaction count, and exceptions. Track Days Payable Outstanding (DPO) to monitor payment timing, and monitor your on-time payment percentage against Fair Payment Code commitments if you hold an award.

Step 15: Log exceptions and improve the process

Document payment exceptions, duplicate payment attempts blocked by controls, and fraud prevention catches. Conduct quarterly reviews of exception patterns and adjust workflows, retrain staff, or add controls based on what you find.

That's the full cycle. The steps that save the most time in practice are the pre-run checks (Steps 1 to 5), because errors caught before submission don't generate downstream work.

How to reduce payment run errors through automation

Most payment run errors happen during manual steps: copying invoice details into spreadsheets, chasing approvals over email, cross-checking bank details by hand. Automation removes those steps.

Automated three-way matching compares invoices against purchase orders and goods receipt notes before any payment is authorised. Discrepancies trigger alerts instead of slipping into the payment batch.

AI-powered invoice capture replaces manual data entry, which is where many reconciliation errors begin. OCR software extracts invoice data automatically, pre-fills fields, and links incoming invoices to the right purchase orders. According to Spendesk, teams using OCR capture see up to 80% less manual data entry.

Configurable approval policies route invoices automatically based on amount thresholds, supplier type, cost centre, and expense category. Instead of relying on email chains and manual chasing, approval policies follow a defined digital path with a complete audit trail, so you only see invoices that have already passed the relevant manager review.

As Tom Libbrecht, VP Finance at Silverfin, put it: "Spendesk is one of the tools that will allow us to scale. We can add people, new expenses, and expense volume, without adding anything to the back-office because it's that far automated. And it still keeps us in control."

Bank file generation with pre-submission validation catches format errors before they reach your bank. Fewer rejected payments, faster supplier settlements.

For most teams, automating invoice capture and approval policies as a first step delivers the fastest value because it removes the highest-volume manual work. This also makes time to tackle payment execution automation, as a second step.

Choosing the right payment run frequency

For most UK mid-market companies, bi-weekly payment runs balance compliance, discount capture, and workload most effectively.

Late payments cost the UK economy an estimated £11 billion annually and contribute to business closures. Monthly runs push invoices received early in the cycle past 30 days, increasing the risk of late settlement. Bi-weekly runs keep more invoices inside the window, which also matters if you hold a Fair Payment Code award committing to 95% on-time payment.

There is also a financial incentive for companies. Standard terms such as a 2% discount for payment within 10 days (with the full balance due in 30 days) deliver an annualised return of about 36%. Monthly payment runs miss most of those windows. Weekly runs capture more, but demand more forecasting and processing time from your AP team.

Spendesk brings these connected processes together: invoice management, accounts payable, approval policies, and payment execution, all into one platform. See how it works for your payment run process.

Frequently asked questions about payment runs

What is the difference between a payment run and a pay run?

A payment run processes supplier invoices and other accounts payable obligations in a batch. A pay run (or payroll run) processes employee salaries and wages. They use different systems and compliance rules, although both may use BACS.

How long does a payment run take?

It depends on the method. BACS takes three business days from submission to settlement. Faster Payments are near-instant. CHAPS settles same-day if you submit before your bank's cut-off. SEPA timings vary by bank but are typically one to two business days within the EEA.

Who should authorise a payment run?

At minimum, two people: one to prepare the batch and a separate person to approve and submit it. ICAEW guidance on duty segregation supports this split. In practice, your AP team typically assembles the run and a finance manager or financial controller gives final sign-off before bank submission.

Can UK businesses still use SEPA after Brexit?

Yes. Some EU financial institutions now treat UK businesses as non-EEA counterparties, which may trigger enhanced due diligence, but SEPA remains available for euro payments.

How do you prevent duplicate payments in a payment run?

Duplicate payments usually come from duplicate supplier records, inconsistent naming conventions, or invoices submitted more than once. Automated duplicate detection and standardised supplier master data are your first defences. Spendesk's automated duplicate detection, three-way matching, and supplier master data controls flag duplicate invoices before they reach the payment batch, reducing overpayment risk and manual reconciliation work for finance teams.