Education & Training Vendor Payment Processing
A controlled procedure for preparing, reviewing, authorising, and executing vendor payment runs to ensure suppliers are paid accurately and on time.
Purpose
To ensure all approved supplier invoices are paid in accordance with agreed terms, payments are properly authorised with dual signatories, and cash flow is managed effectively through scheduled payment runs.
Scope
Covers the end-to-end payment process from generating the payment batch through to execution, bank submission, and reconciliation. Applies to all payments made via EFT, BPAY, cheque, or international transfer.
Prerequisites
- All invoices in the payment batch have been approved and posted to the accounts payable ledger
- Supplier bank details are verified and current in the accounting system
- Access to the banking platform with appropriate payment authorisation levels
- Sufficient funds available in the operating account to cover the payment run
Supports compliance with the ESOS framework, CRICOS requirements, ASQA standards, and state education department reporting.
Step-by-Step Procedure
Generate the Payment Batch
Run the accounts payable payment proposal to identify all invoices due for payment based on their due dates and payment terms.
- 1.1Navigate to the payment processing module in the accounting software
- 1.2Set the payment date and select invoices due up to and including that date
- 1.3Review the proposed payment list for completeness and accuracy
- 1.4Exclude any invoices that are on hold, disputed, or pending further approval
Review Supplier Bank Details
Verify that the bank account details on file for each supplier in the payment batch are current and have been properly verified.
- 2.1Cross-check BSB and account numbers against the supplier master file
- 2.2Confirm any recently changed bank details have been verified through an independent channel
- 2.3Flag any suppliers with unverified or recently changed bank details for additional review
- Always verify bank detail changes by calling the supplier on a known phone number — never rely solely on email requests to change bank details as this is a common fraud vector
Prepare Payment Summary for Approval
Generate the payment run summary report listing all suppliers, invoice numbers, and amounts for review by the authorising signatories.
- 3.1Generate the payment run summary from the accounting software
- 3.2Verify the total payment amount and number of suppliers
- 3.3Attach the summary to the payment authorisation form
- 3.4Include any notes on high-value or unusual payments that require attention
Obtain Dual Authorisation
Present the payment batch to two authorised signatories for review and approval before execution.
- 4.1Submit the payment summary and supporting invoices to the first authorised signatory
- 4.2The first signatory reviews and signs off on the payment batch
- 4.3Submit to the second authorised signatory for independent review and approval
- 4.4Record both approvals with date and signature
- Ensure the two signatories are independent — the person who prepared the batch should not be one of the approvers
Generate and Upload the Payment File
Create the ABA or bank-compatible payment file from the approved batch and upload it to the banking platform.
- 5.1Generate the ABA payment file from the accounting software
- 5.2Verify the file total matches the approved payment summary total
- 5.3Log into the banking platform and upload the payment file
- 5.4Set the payment processing date
Authorise Payment in the Banking Platform
The authorised signatories approve the payment batch within the banking platform to execute the payments.
- 6.1The first signatory logs into the banking platform and reviews the payment batch
- 6.2The first signatory authorises the batch
- 6.3The second signatory independently reviews and authorises
- 6.4Confirm the payment status shows as submitted for processing
Record Payments and Send Remittance Advices
Mark invoices as paid in the accounting system and send remittance advices to suppliers confirming payment details.
- 7.1Update the payment status of all invoices in the batch to "paid"
- 7.2Generate remittance advices from the accounting software
- 7.3Email remittance advices to each supplier
- 7.4Record the bank batch reference number against the payment run
Reconcile the Payment Run
Reconcile the payment batch to the bank statement once the payments have cleared to confirm all payments were processed correctly.
- 8.1Check the bank statement for the cleared payment batch amount
- 8.2Match the cleared amount to the payment run total
- 8.3Investigate any returned or rejected payments
- 8.4Update the accounts payable records for any payment failures
Quality Checkpoints
Common Mistakes to Avoid
Expected Outcomes
At least 95% of supplier invoices are paid within the agreed payment terms.
Fewer than 0.5% of payments require correction or reversal due to errors.
Supplier payment queries are reduced by 50% through consistent remittance advice distribution.
Frequently Asked Questions
How often are payment runs processed?
Payment runs are typically processed weekly or fortnightly, depending on the organisation payment schedule. Urgent or ad-hoc payments may be processed outside the regular schedule with Finance Manager approval.
What should I do if a supplier requests a change to their bank details?
Never update bank details based solely on an email request. Call the supplier on a known phone number to verify the change, and require written confirmation on company letterhead before updating the system.
How are international payments processed?
International payments are processed separately using the bank telegraphic transfer facility. Additional information including the SWIFT code, IBAN, and intermediary bank details may be required. International payments may also require specific approval.
What happens if a payment is rejected by the bank?
Investigate the rejection reason (e.g., incorrect BSB, closed account). Contact the supplier to obtain updated bank details, re-verify, and include the payment in the next payment run.
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