What is a check run?

Definition

A check run is the scheduled batch in which approved vendor bills are paid. On the books, each bill in the run reduces accounts payable and reduces cash.

The original expense was recorded when the bill was entered. The run is the later cash event, not a new cost.

Where it shows up

Balance sheet: Located in the current liabilities section, as payables down and cash down.

P&L: Related to nothing extra; the expense was already recorded.

Cash flow: Related to cash leaving on the run.

See also: Accounts Payable · Vendor Bill · Approval Workflow

When the run posts, current liabilities fall because the open payables are cleared. Cash falls by the same total, so net assets do not change.

On the Statement of Cash Flows, the payments are operating cash out. The Income Statement stays still because the bakery cost was already booked when the bill arrived.

The accounts payable aging should drop for every bill included in the run. If a bill is still on the aging after Friday, it was left out of the batch.

Days payable outstanding moves with how often you run checks and which due dates you include. A weekly Friday run is a cash-timing choice, not a new expense.

On the bank feed the items show as checks, ACH, or both, depending on how you paid. The run is the batch that produced those items.

How it works

Bills sit in payables after they are entered and approved. The run is the later step that selects which of those bills will be paid this cycle.

How a check run usually works:

• Pull approved open payables that are due
• Build a payment batch (checks, ACH, or both)
• Issue the payments and record the cash out / payable clear
• Send any positive-pay file the bank requires
• Track uncleared items on the next bank reconciliation

Someone picks a pay-through date, a bank account, and the bills that are due. The software then prints checks, sends ACH, or does both in one batch.

Each payment in the run hits cash and the payable for that vendor. One $1,200 bakery bill is one pair of lines inside a larger Friday total.

The original bill is not entered again. Stay on the payment, not on the expense that was already on the books.

Unsigned or unapproved bills should not be in the run. The approval step is what keeps a draft request from turning into cash.

After the run, outstanding checks sit until the bank clears them. The payable is already down on the books, and the bank rec explains the checks that have not cleared yet.

A run can mix check stock and electronic payments. The batch is still one event even if the rails differ.

Support is the payment register plus the check copies or ACH confirmation. Keep those with the Friday date so anyone can see what left cash.

Example

A cafe runs checks every Friday for bakery bills. This Friday includes one $1,200 bill that was already approved.

The cafe records that bill's payment this way:

Debit: Accounts payable $1,200

Credit: Cash $1,200

Payables fall by $1,200. Cash falls by $1,200.

The Income Statement does not move. The bakery expense was recorded when the bill was entered, not when the check printed.

The rest of Friday's run uses the same pattern for each bill. Add the payments together to see how much cash the whole batch took.

Common mix-ups

A check run is not the original vendor bill. The bill creates the payable and the expense, while the run is the later cash payment that clears that payable.

A check run is not the same thing as ACH. ACH is one rail that a run may use, and the run is the scheduled batch of bills being paid.

A check run is not positive pay. Positive pay is a bank control that checks issued items against a list, and the run is the batch that created those items.

Related terms

• Accounts Payable: Amounts the business owes vendors for goods or services already received.
• Vendor Bill: The invoice a supplier sends that becomes a payable.
• Accounts Payable Aging: A report bucketing unpaid vendor bills by how long they have been outstanding.
• Approval Workflow: The routing of a request or bill through the people who must sign off.
• ACH Payment: An electronic bank-to-bank transfer used for routine payments.
• Positive Pay: A bank control that verifies issued checks against a list before clearing them.
• Days Payable Outstanding: The average number of days the business takes to pay its vendors.
• Cash Flow Forecast: A forward projection of cash receipts and payments.