Guide to batch payment processing for accounts payable

Apr 05, 2024

When a company’s accounting department processes invoices as and when they come the practice is known as real-time invoice processing.

While real-time invoice processing is a commonly practiced process it is not, however, the most efficient. Growing companies, in particular, may struggle to deal with the ever-increasing invoice processing workload.


The alternative to real-time invoice processing is batch payment processing for accounts payable. Batch payment processing can help resolve many of the issues commonly associated with real-time invoice processing.

It is especially useful for companies that are in their growing stage and are dealing with an increasing volume of invoices every day.

What does batch payment processing mean?

When you pay multiple invoices at the same time in a singular payment through a singular bank account it is called a batch payment.

Batch payment processing of invoices is commonly looked at as a more efficient alternative to the real-time processing of invoices.


On your bank statement, you will find the batch list transaction to be showing up as a single debit. Batch payment processing results in much faster resolution of payments and merchants who are, therefore, happier.

Bank wire transfers are the commonly used way to send out batch payments.

How does batch payment processing work?

While different types of accounting systems and accounts payable automation software may differ in terms of nuances, batch payment processing usually works through the following steps:


It starts with the creation of batches of invoices, payments, or adjustments, which are then reviewed for possible discrepancies and mismatches. To help lower payment fees and save on time, batches are prepped for submission at a single point in time.


After this, the batches of invoices are then posted within AP automation or other accounting software and linked within an accounting system to the general ledger.


Via accounts payable posting journals and general ledger transaction reports batches are backed up. This is a useful practice to help be prepared for audits and to ensure consistency and accuracy of data.


Batch payments can also be done without using automation, however, a manual approach will cost a lot of time and effort.

You can do a weekly payment run where employees must get approval on invoices, get the payments released in front of the CEO or CFO, and execute checks.

Manual approaches to batch payments are also susceptible to human error. This can lead to payment duplication and strains in vendor relationships.

When to avoid making batch payments?

Given below are scenarios where accounts payment batch processing is not a recommended option:

1. High-profile vendors

When you have high-profile vendors to make payments to it is best not to process their payments along with others.

Maintaining a good relationship with such vendors is of high priority and you shouldn’t risk delaying or even missing their payments simply because of batch processing discrepancies.

2. Quick deal payments

Typically, batch processing of invoice payments over regular interval periods. This is not ideal for settling quick deals.

If you have a deal to settle quickly or an offer to avail that is usable for a limited time you should process the invoice in real-time to avoid missing out on deals or delaying payments.

3. High-priority transactions

In cases of high-dollar, mission-critical, or quick-turnaround deals, arranging a one-off wire transfer by calling a financial institution might be a course of action that is far more logical than delaying the payment to be processed in a batch.

Losing out on or delaying a big transaction because of batch processing is not worth it.

4. High-valued transactions

High-value transactions mandate specific attention to detail. You can’t afford errors, delays, or discrepancies in the processing of such transactions.

Interesting read: How can businesses avoid duplicate invoice payments?

What are the benefits of automated batch payment processing?

1. Simpler and easier expense reconciliation

A single transaction is far more suitable for accounts payable departments. Processing many payments in a single transaction is far easier than having to deal with a flood of individual transactions on banking statements.

This results in a consolidated and concise payment statement.

2. Faster and lower cost

By processing payments via batches you can cut out labor, equipment, and other such operational costs. This is because batch processing does not require any human intervention or oversight.

Moreover, given that batch processing systems are made to provide efficient, quick, and reliable service your accounting personnel can focus on more important, value-generating tasks.

3. Hands-free payment processing

Hands-free payment batch processing is far more suitable for the hybrid and remote working environments we work in today.

Accounts payable departments can forgo the multiple steps that are typically required to start funds flow. Many in the industry agree that the catalyst behind digitizing this financial function has been the pandemic.

Using batch payment processing to consolidate workflow and reduce the steps required creates a more efficient process for making payments and also benefits employees greatly.

4. Standard payment timelines

There is no standard payment timeline when working with a manual workflow. The manual management of timelines by the accounts payable department has to be done by staying available hands-on at all times.

In contrast, working with an automated batch processing system means that all your payments will be taken care of by accounts payable automation solution that will also create standard payment timelines for your business.


Having a standard payment timeline in place also means that it will be easier for your accounts payable department to ensure timely delivery of invoice payments to your vendors.

On-time payments are extremely important if you want to make sure the relationships you maintain with your vendors and suppliers are kept healthy.

5. One Workflow for all different types of payments

If you’re still working with a manual, traditional payment workflow it is likely that you will have to use new processes for all the different types of payment methods you deal with.

Automated batch processing, however, is capable of taking care of a variety of different payment types easily.

Regardless of the different types of payments required by vendors (for example virtual card, check, or ACH batch processing times), all of them can be processed using one account payable workflow.

This can reduce the requirement for manual processes even further.

6. Improved Security

The greater degree of control you get with standard timelines can also help you assert an increased amount of control over payment processing.

This can lead to improved security given that payments get carried out as soon as they are authorized.

Payment workflows for automated batch processing of payments also come with in-built controls like two-factor authentication, segregation of duties, and dual approvals for payments that go over certain amounts.

Related read: How does Volopay automate bill payments?

Major challenges associated with the batch payments process

1. Manual Processes

Batch payments processed using manual systems can be the stuff of nightmares. Compiling, processing, and recording a large number of invoices at the same time can take a lot of time and effort by your accounts payable teams.

Manual processes are a massive obstacle to batch payment processing.

2. New payment methods

Typically, new payment methods do come with more processes associated with them. With manually processing batch payments as well this problem can become a significant obstacle.

When you are processing multiple invoices at the same time not all of them will be from the same vendor and different vendors may require different payment methods.

This can end up causing confusion and a lot of time and effort required to resolve the same.

3. Single debit

When you use the batch processing method for payments your transaction will show as a single debit on your bank statement. This might not be ideal in case you intend on seeing the individual payments being debited from your account.

Expense reporting, in particular, may suffer from this because it could become difficult to retrieve and match payments with their transactions at the time of auditing.

4. Deployment and training

Learning how to manage batch processing systems also require some degree of training, like many other technologies.

Among other things, accounts payable teams will have to learn and acquire skills required to know how to schedule processing, what triggers a batch, and what is the meaning of exception notifications.

5. Debugging

Batch payment processing systems can often be complicated to use. They require an individual or a team on your staff to manage and be familiar with the system.

If not, your organization or company might feel the need to get on board a specialist in batch processing for help.

6. Cost

Batch processing of payments might not be a feasible option for all types of companies. This is because the upfront investment costs associated with batch processing infrastructure can add up to be a lot.

Incurring this cost might always make sense for a business to take up.

7. Lack of flexibility

It can be difficult to be flexible with regard to informational changes in batch processing of payments.

In case information regarding orders such as amount, forwarder, etc. are changed it can be hard to process them in time and this can increase the risk that payments will be made out to vendors with incorrect or erroneous information.

To sum it all up when payment batch processing is done companies can process multiple different invoices at the same time through a singular transaction and a singular bank account.

This can help companies process payments faster, hands-free, and easier, with improved security and more standardized payment timelines.


Now that you have gained a deeper, more thorough understanding of batch payment processing and the advantages and disadvantages associated with them, you’re likely to have an easier time deciding.

Whether choosing to process payments in batches is the right way to go for your business’s accounting systems. If you do choose to go for batch payments ensure you weigh your options well before making a choice.

What is an example of batch processing?

Batch payment processing examples include the generation of bills, transactions of credit cards, processing of output and input in the operating system, ACH payments, and more.

What is a batch ACH payment?

In contrast to wire transfers, which are typically processed in real-time, the ACH network does payment processing in batches where many transactions are processed at the same time and after regular intervals.

Can you make a batch payment to a vendor who requires payment immediately?

No, it is not recommended to process immediate payments using batch payments processing because if you do your vendor will have to wait for the payment to be processed, which is not ideal.

How is batch processing used in banks?

Batch payment processing can be used by banks to process the high number of transactions they receive on a daily basis.

When to use batch payments?

Batch payments are best used in cases where the transaction is not of high value, is not mission-critical, and is not immediately required to be processed.

Automate payments processing and never miss a due date