Home For AAT student members AQ 2016 Foundation Certificate in accounting Bookkeeping Transactions
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Vendor payment run dates

Hi, I have recently started in a new role as purchase ledger superviser and one of the duties I oversee is supplier payment runs. These are done weekly but I was surprised to discover that only invoices due for payment on the run date were picked up, I would have imagined that invoices due up until the next payment run should be included, otherwise they would be overdue? My old employer ran daily pay runs but even then, payments would include any invoices due by the time the payment hit the suppliers bank. Is there a general ruling around this?
Thanks in advance.

Comments

  • CheesypeesyCheesypeesy MAAT Posts: 102
    That does sound odd, I would expect the same as you. Perhaps the system needs configuring to pick up those invoices?
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • RosalynRosalyn Registered Posts: 3
    It’s a manual process, the systems prompts you for a date which you want invoices included for, I did challenge this with the finance manager but was told this is how it should be done or we would not be utilizing the full 30 days credit terms for all invoices, I still don’t know if this is right or not? To me it means that we are always having invoices up to a week overdue, I will question this again, but wanted to find some official guidelines first, not found anything yet though which made me think I may be wrong?
  • CheesypeesyCheesypeesy MAAT Posts: 102
    Perhaps the finance manager is willing to allow some invoices to go a few days overdue if it means not paying other invoices early? They may be trying to improve the company's cash flow position?

    I imagine they're aware of the risks of delaying payment, but feels the benefits of maximising their credit terms (sometimes slightly beyond them) is worth the risk. In any case, I wouldn't push it too much given that you've only recently started.
    Matthew Dearlove MAAT
    Currently on CIMA Management Level. Passed P2, F2 and E2. Preparing for November 19 MCS.
  • RosalynRosalyn Registered Posts: 3
    Thanks Cheesypeesy,
    I think your right, I though it would be a cash flow issue, I will keep my opinions to myself as the newby, for now anyway ;-)

    Thank you for your feedback.
    Cheesypeesy
Sign In or Register to comment.