Paying Vendors — Payments & Payment Batches

Once a bill is approved, the next step is paying the vendor. Timely and accurate payments maintain vendor relationships, protect credit terms, and keep your accounts clean. In Udyamo ERP Lite, vendor payments can be made one at a time — a single payment against a single bill — or grouped into payment batches for bulk processing.

Individual payments suit one-off or urgent situations: a vendor demanding immediate settlement, or a critical spare part supplier who needs payment before the next delivery. Payment batches suit the routine: processing all outstanding vendor bills in a weekly or fortnightly payment run, reviewing and approving the batch, and then exporting a bank file for NEFT/RTGS processing.

This chapter covers both approaches and walks you through the complete workflow from recording a payment to processing a batch.

What You Will Learn

• How individual vendor payments work
• Payment methods and linking payments to bills
• Partial payments and their effect on bill status
• The payment batch concept and why it matters
• Creating a payment batch from outstanding bills
• The batch approval workflow (draft, approved, exported)
• Step-by-step: making an individual payment
• Step-by-step: creating and approving a payment batch

Prerequisites

• At least one approved bill with an outstanding balance (covered in Chapter 28)
• Bank accounts configured in the system (covered in Chapter 35 or Settings > Bank Accounts)
• Vendor bank details recorded if using payment batches for bank export (covered in Chapter 26)

Individual Vendor Payments

An individual payment records a single payment made against a specific bill. In Udyamo ERP Lite, the same Payment model handles both customer receipts and vendor payments — the difference is the payable_type field, which is set to Bill for vendor payments and Invoice for customer receipts.

Payment Fields

Payment Methods

In the Indian business context, common vendor payment methods include:

Tip: Record the Reference Number for every electronic payment. The UTR (Unique Transaction Reference) number for NEFT/RTGS is the definitive proof of payment. If a vendor disputes a payment, the UTR is what you provide to your bank for verification.

Linking Payments to Bills

Every vendor payment must be linked to a bill. When you navigate to a bill and click to record a payment, the system automatically sets the payable_type to Bill and the payable_id to the specific bill. This link ensures that:

• The bill's amount_paid increases by the payment amount
• The bill's balance_due decreases accordingly
• The bill status updates (to Partially Paid or Paid)
• The vendor's accounts payable ledger reflects the payment

Partial Payments

Not every bill is paid in full at once. Partial payments are common when:

• Cash flow constraints require spreading payments across weeks
• A dispute on part of the bill amount is being resolved
• The vendor has agreed to milestone-based payments

When a partial payment is made, the bill status changes to Partially Paid. The balance due reflects the remaining amount. You can make multiple partial payments against the same bill until the balance reaches zero, at which point the status changes to Paid.

Example: A bill for Rs. 1,50,000 with two partial payments:

Payment Batches

The Concept

A payment batch groups multiple vendor payments into a single batch for review, approval, and bulk processing. Instead of making 30 individual NEFT transfers for 30 vendors, you create a batch containing all 30 payments, get it approved by the authorized person, and export it as a single file for upload to your net banking portal.

Payment batches bring structure and control to the payment process:

• Visibility — Everyone can see which bills are being paid in this cycle and the total outflow
• Approval — A designated approver reviews the batch before any money moves
• Efficiency — One file upload to net banking replaces 30 individual transactions
• Audit trail — The batch is a single record linking to all constituent payments

Payment Batch Fields

Batch Items

Each batch contains one or more Payment Batch Items:

The total of all batch item amounts equals the batch's total amount.

Batch Lifecycle

Draft  -->  Approved  -->  Exported

Draft — The batch has been created and bills have been added. Amounts can be adjusted, bills can be added or removed. No financial commitment yet.

Approved — An authorized person has reviewed the batch and approved it for payment. The batch is locked — no further changes are allowed. This is the control point that separates payment preparation from payment execution.

Exported — The batch has been exported as a bank payment file. The file is ready for upload to the bank's net banking portal. Individual payments are recorded against each bill in the batch.

Creating a Batch from Outstanding Bills

Udyamo ERP Lite provides a dedicated workflow for creating payment batches from outstanding bills: the New from Bills action.

1. Navigate to Purchases > Payment Batches.
2. Click New from Bills.
3. The system presents a list of all approved bills with outstanding balances.
4. Select the bills you want to include in this payment run.
5. For each bill, confirm or adjust the payment amount (you can pay less than the full balance).
6. Select the Bank Account for the batch.
7. Set the Payment Date.
8. Click Create from Bills.

The system creates a payment batch in draft status with the selected bills and amounts.

Tip: Review the total amount before creating the batch. Compare it against your bank account balance to ensure sufficient funds. The system does not automatically check bank balances.

Step-by-Step: Making an Individual Payment

Scenario: You need to pay Specialty Chemicals Ltd. Rs. 42,500 against their bill for cutting fluid supplies, via NEFT.

1. Navigate to Purchases > Bills and open the bill from Specialty Chemicals Ltd.
2. Verify the bill status is Approved and the balance due is Rs. 42,500.
3. Click Record Payment (or navigate to the bill's payments section and click New Payment).
4. Enter the payment details:
   • Amount: 42,500.00
   • Payment Date: today
   • Payment Method: NEFT
   • Reference Number: UTR20250115NEFT001234 (from your bank statement)
   • Bank Account: HDFC Current Account
5. Click Save.

The bill status updates to Paid (assuming this was the full balance), and the payment appears in the bill's payment history.

Step-by-Step: Creating and Approving a Payment Batch

Scenario: It is the end of the fortnight and you have 5 approved bills from different vendors totaling Rs. 3,87,000. You want to process them as a single batch payment run.

1. Navigate to Purchases > Payment Batches and click New from Bills.
2. The system displays all approved bills with outstanding balances.
3. Select the 5 bills you want to pay:
   • National Steel Distributors — Rs. 1,45,000
   • Precision Machining Works — Rs. 87,000 (net of TDS)
   • Industrial Bearings Corporation — Rs. 34,220
   • Rajkot Fasteners Pvt. Ltd. — Rs. 78,780
   • Specialty Chemicals Ltd. — Rs. 42,000
4. Select the Bank Account: ICICI Current Account.
5. Set the Payment Date to the next business day.
6. Add a note: Fortnightly payment run — 15 Jan 2026.
7. Click Create from Bills.
8. The batch is created in Draft status with a total of Rs. 3,87,000.
9. Review each line item in the batch for accuracy.
10. Click Approve.

The batch status changes to Approved. It is now ready for bank export (covered in Chapter 30). No further edits are possible.

Tips & Best Practices

Tip: Establish a fixed payment cycle — weekly or fortnightly. Process all outstanding bills in a batch on the designated day. This creates predictability for your vendors, simplifies cash flow planning, and reduces the time spent on ad-hoc payment requests.

Tip: Always record the UTR or cheque number in the Reference Number field. This is your proof of payment and the key to resolving any disputes with vendors or your bank.

Warning: Once a payment batch is approved, it cannot be edited. Review the batch carefully before approval. If a bill needs to be removed or an amount changed after approval, you will need to create a new batch.

Tip: Use the payment batch notes field to record the context: "Monthly payment run — January 2026" or "Urgent payment — production material shortage." This makes it easy to locate specific batches later.

Warning: Ensure that vendor bank details are complete and verified before including them in a payment batch. Incorrect IFSC codes or account numbers will cause the bank to reject the payment, delaying the vendor and creating reconciliation work.

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