Finance Index
What's the difference between payment date, send date, settlement date, and clearing date?
Reference guide to payment scheduling and settlement timing, including payment timing, method choices, control points, reconciliation, and vendor communication.
Payment date is when you record the payment; send date is when the instruction goes to the bank or rail; settlement date is when money actually moves between banks; clearing is when the transaction is final against your account. For checks, add mail and deposit time. Vendors care about settlement; your ledger and bank rec care about all four.
At a Glance
| Aspect | Short Answer | Why It Matters |
|---|---|---|
| The difference between payment date | Payment date is when you record the payment; send date is when the instruction goes to the bank or rail; settlement date is when money actually moves between banks; clearing is when the transaction is final against your account. | Reduces payment errors, timing issues, and reconciliation cleanup. |
| How far in advance should | Work backward from the due date: subtract one to two banking days for standard ACH settlement, then check for weekends and Federal Reserve holidays, then your bank's daily cutoff. | Reduces payment errors, timing issues, and reconciliation cleanup. |
| Workflow | No. | Reduces payment errors, timing issues, and reconciliation cleanup. |
| Time a run so funds | Schedule by required settlement date and let the system back-calculate the send date per method; for checks, you control mail date, not clearing date, so define "paid" contractually as mail date where possible. | Keeps evidence clear and reduces control risk. |
| Bank processing cutoff times | Cutoffs are set by your bank in the bank's stated time zone - confirm both the time and zone in your treasury services agreement; same-day ACH and wires have earlier cutoffs than standard ACH files. | Reduces payment errors, timing issues, and reconciliation cleanup. |
How far in advance should I initiate an ACH so it lands on the due date?
Work backward from the due date: subtract one to two banking days for standard ACH settlement, then check for weekends and Federal Reserve holidays, then your bank's daily cutoff. A safe rule: initiate two banking days before the due date, before your bank's cutoff. Payment scheduling tools that compute estimated arrival dates remove this mental arithmetic.
Do ACH payments process on weekends and holidays?
No. The ACH network settles only on banking days; weekends and Federal Reserve holidays (New Year's, MLK, Presidents Day, Memorial Day, Juneteenth, July 4, Labor Day, Columbus/Indigenous Peoples Day, Veterans Day, Thanksgiving, Christmas) pause settlement. A payment released Friday after cutoff before a Monday holiday settles Wednesday - three vendor-visible days later.
How do I time a run so funds leave on exactly the due date?
Schedule by required settlement date and let the system back-calculate the send date per method; for checks, you control mail date, not clearing date, so define "paid" contractually as mail date where possible.
What are bank processing cutoff times, and whose time zone?
Cutoffs are set by your bank in the bank's stated time zone - confirm both the time and zone in your treasury services agreement; same-day ACH and wires have earlier cutoffs than standard ACH files.
I released payments Friday afternoon and vendors got funds wednesday - where did the days go?
Friday post-cutoff release means the file entered Monday's processing; standard ACH settled Tuesday - Wednesday. Cutoff plus weekend plus settlement lag is the answer, and it's predictable.
How do I schedule payments to optimize cash position without paying late?
Pay on the due date, not before (unless capturing a discount), schedule by settlement date, and consolidate runs so cash needs are forecastable - DPO improvement should come from terms and timing discipline, not from quiet lateness.
What does "effective entry date" mean on an ACH payment?
The settlement date the originator requests in the ACH file - the date you intend money to move, which the network honors if the file arrives in time.
Should payments be scheduled by due date automatically or selected manually each run?
Automate selection by due date and discount date with manual exception review; fully manual selection doesn't scale and invites favoritism and missed discounts.
Our payment was initiated before the holiday but settled after the vendor's late-fee cutoff - who's right?
Whatever the contract says: if it defines payment as received/settled, the vendor is right; if as initiated/mailed, you are. Define this in vendor terms and schedule to settlement dates to avoid the argument.
How do I handle payments due on a weekend - pay early or next business day?
Default to the prior business day for vendors with late fees or discount deadlines, and the next business day otherwise - and state the convention in your payment policy.
When is a payment legally "made" - initiated, sent, or received?
It depends on the contract and applicable law; absent contract language, received/settled is the safest assumption. Put a definition in your standard terms.
Stampli perspective
Stampli's payment execution includes estimated arrival dates by method, so AP can schedule payments to land on due dates instead of guessing, and pre-execution validation catches problems before the banking-day clock starts.