{"id":1428,"date":"2014-02-04T18:26:58","date_gmt":"2014-02-04T18:26:58","guid":{"rendered":"https:\/\/www.peeriosity.com\/shared-services\/articles\/?p=1428"},"modified":"2022-06-22T09:44:10","modified_gmt":"2022-06-22T09:44:10","slug":"daily-payment-runs-are-not-as-common-as-you-might-think","status":"publish","type":"post","link":"https:\/\/www.peeriosity.com\/shared-services\/articles\/2014\/02\/daily-payment-runs-are-not-as-common-as-you-might-think\/","title":{"rendered":"Daily Payment Runs Are Not As Common As You Might Think"},"content":{"rendered":"

Many would guess that for companies who have USD $5B or more in annual revenues, the practice of daily payment runs by Accounts Payable<\/a> would be the norm.\u00a0 <\/span>That guess would be wrong.\u00a0 <\/span>Surprisingly, while roughly half of the large global companies process payments on a daily basis, the other half are making payments on a weekly basis, and, in some cases, less frequently.\u00a0 <\/span>\u00a0<\/span><\/span><\/p>\n

Recently an iPollingTM<\/sup> question from a manufacturing company with over $100B in annual revenue asked the question, \u201cWhat is the frequency of your company\u2019s Accounts Payable payment runs?\u201d with the follow-up question, \u201cOn what day of the week does your company settle payments?\u201d\u00a0 <\/span>The company that created the poll currently has daily payment runs; however, they are considering changes that might positively affect their processes and cash flow<\/a>.\u00a0\u00a0\u00a0 <\/span><\/span><\/p>\n

Using Peeriosity\u2019s powerful custom research capabilities, within two days of creating the iPoll, 37 peer companies responded, providing the member with the facts about their processes and procedures<\/a>. \u00a0<\/span>In addition, because poll results provide details for who responded, including their first name, job title, company name, and global region represented, everyone had an at-a-glance view of the range of approaches followed, with the ability to directly contact other respondents using Peer MailTM<\/sup> to further explore individual responses.<\/span><\/p>\n

Here are the details for the first question regarding the frequency of payment runs:<\/span><\/p>\n

\"frequency<\/p>\n

\u00a0<\/span>The results from the second question provide some excellent exposure to when other major companies settle payments.<\/span><\/p>\n

\"ipolling<\/p>\n

Here are some of the additional comments provided by members:<\/span><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We process ACH payments daily, but only cut checks once a week.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Europe payments are issued weekly. Mexico payments are made Tuesday & Thursday. US payments are made Monday & Wednesday.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Payments are made daily to all suppliers and customers in accordance with their payment terms<\/a>. Payments for due dates which fall on the weekend or a holiday are sent the following business day.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Payments are both made and settled daily.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Primarily, we process the payment files on Tuesdays; however, there are a number of other payables that are processed daily.\u00a0 <\/span>Settlements occur daily.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We pay 3rd parties and employees on a daily basis. Foreign currency payments are two times per week, and intercompany payments are once per month. <\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>In North America, we run paper checks on Fridays. Electronic payments (for example, EFT and Virtual Card) are run daily. In Europe, electronic payments occur daily.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>For the U.S. operating units, we have payment runs as well as settlements each business day, for both paper checks and electronic payments.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Standard payment runs are bi-weekly on the 1st and 15th of each month. Ad-hoc or emergency payment runs may also be completed on a weekly basis, but make up a much lower proportion of total volume and spend.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>Most company codes are paid weekly. The specific day depends on the company code.<\/span><\/em><\/p>\n

\u00b7\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/span><\/span><\/span>We perform weekly payments, so the bulk of payments occur on Sunday. We still have daily payments, but they are the exceptions (for example, for utilities and to secure vendor discounts).<\/span><\/em><\/p>\n

One of the comments, in particular, summarized the business case associated with selecting the timing of payments:<\/span><\/p>\n