Prepare a Supplier Payment Run You Can Afford

Establish the amount available for this run

Start with cleared cash and identify pending payments, payroll, direct debits and other commitments before the next reliable receipts. Reconcile this view with your cash forecast. Subtract each item once, whether it is already reflected in the bank's available balance or still scheduled separately.

Don't add an unapproved borrowing limit or a customer's unconfirmed promise to available cash. Check the critical payment dates, not just the Friday total.

Check the invoice before putting it in the file

Match the supplier, invoice number, goods or services received, payment terms and balance outstanding. Look for duplicated invoices and part-payments. Confirm whether a credit is issued and applicable; an expected credit isn't the same as one accepted by both parties.

When bank details change, verify them independently using a previously trusted contact route. An email in the same thread as the invoice isn't independent confirmation. The Australian Cyber Security Centre's business email compromise guidance explains this check. Flag unresolved bank-detail changes for the person approving the run.

Assumptions: AUD total amounts. Cleared cash $18,000. Other commitments before reliable receipts $9,000 and chosen operating floor $3,000 leave $6,000 for this run. The disputed item is not treated as legally deferred.

Supplier / invoice	Due	Verified position	Proposed action	Amount in run
Packaging / P104	Today	$3,000 invoice less issued $500 credit	Pay agreed net balance	$2,500
Materials / M208	Tomorrow	$2,000; delivery confirmed	Pay	$2,000
Repair / R019	Today	$1,800 invoice; $300 disputed	Resolve with supplier; escalate timing	$0 pending resolution
Run total	Before next receipt	Available for run: $6,000	$1,500 capacity remains	$4,500

Original ASBG worked example. All businesses, amounts and scenarios are fictional. The table contains the same figures as the visual.

Paying the $4,500 leaves $13,500 in the bank, of which $9,000 covers other commitments and $3,000 is the chosen floor. The remaining $1,500 doesn't resolve the $1,800 repair bill. Even if the supplier agrees to the $300 reduction, the payment decision and revised invoice balance still need recording.

Keep holds from becoming forgotten debts

Every exception needs an owner, next action and review time. Contact the supplier promptly about disputed or unaffordable amounts. Don't assume that putting “hold” in the spreadsheet suspends the due date, waives fees or permits a part-payment.

Use the supplier negotiation worksheet for a concrete proposal. The business.gov.au supplier guidance recommends written terms and early communication about issues.

Approve, release and reconcile separately

1. PrepareCheck invoices, credit notes, destination accounts and the forecast.
2. ApproveReview the total and exceptions against cash and delegated authority.
3. Release and matchSend the approved payments, retain confirmation and match each cleared amount to its invoice.

If you are the only person in the business, make a deliberate second pass before authorising. Compare the bank total and number of recipients with the approved list. Lock the reviewed version so a later edit doesn't silently change what you thought you approved.

Know when a payment run isn't the answer

This worksheet doesn't rank creditors when a business cannot meet its debts. If that may be your position, get prompt advice from an appropriately qualified accountant, insolvency practitioner or lawyer. ASIC's financial-difficulties guidance explains the need to act early.

Key takeaways

• Reconcile invoice balances and cash before approval.
• Give every exception a named owner and next action.
• Record agreement to changed terms; an internal hold is not an agreement.

Where to get help

Your bookkeeper can prepare the reconciliation and exception list. Use the bookkeeping routine to keep credits and supplier balances current between payment runs.