Understanding the Difference between the Due Date and Processed Date

All financial instructions have a due date and a processed date. The due date is the date on which a payment or invoice is scheduled to be received by the nominee. For example, in the case of an electronic funds transfer, the due date is the date that the payment is scheduled to be deposited in the nominee's bank account and available to be withdrawn. As part of financial component processing, the due date is calculated using the nominee's delivery pattern. For example, if a client is paid every week on a Monday in advance, their due date would always be a Monday, that day being the day they are always due to be paid or invoiced.

The due date should not be confused with the actual date the nominee gets paid, which is known as the payment date. This is because in order to get payment to the nominee in time for the due date, any payments or invoices need to be processed before the financial processing date closes. For example, the financial processing date for the above delivery pattern closes on a Thursday (this is the offset period required to ensure the money can get to the nominee's bank account by the following Monday). On Wednesday, the client notifies a change in their circumstances which took effect from the Monday of this week. This change causes a reassessment which results in the client being underpaid. The underpayment covers the period from Monday to Friday of this week (because the client is paid weekly in advance). The amount that the client is underpaid is actually 'due' on the Monday at the start of this week. However, because this date has already past, the client can't actually receive this payment on this date.

However when changes occur that impact when payment can physically be made, it is important to note that the 'processed date' must also be considered when viewing financial transactions. The casework can use the processed date to reconcile that a due date may not have been met for the payment, where the processed date does not allow enough time for the due date to still be met. Taking the above example where the due date is Monday 13th November, but the actual processed date is Wednesday 15th November (which falls in time for the financial processing of the following Monday's payment), it reveals that payment date will be the Monday, 20th November.